Kinder Morgan is increasing dividends in 2022 for the fifth consecutive year, a move that will benefit energy infrastructure investors.

KMI’s fourth quarter 2021 earnings were right in line with expectations, and the energy infrastructure company is on track to deliver another solid year in 2022. The pipeline giant continues to offer stability amid turbulent markets. 

“We closed out 2021 as a record year financially, beginning with our outstanding commercial and operational performance during Winter Storm Uri. We followed that by achieving our 2021 EBITDA target — not counting the earnings during the storm,” CEO Steve Kean said during the firm’s earnings call on January 19.

During the fourth quarter, KMI generated revenue of $4.4 billion, up $1.3 billion from the fourth quarter of 2020, CFO David Michels said during the firm’s earnings call.

“Revenue is up largely due to higher commodity prices, which also increased our cost of sales in the businesses where we purchase and sell commodities,” Michels said.

For the fourth quarter of 2021, KMI is declaring a dividend of $0.27 per share, bringing the declared dividends for the full year to $1.08 — a 3% increase from the dividends declared for 2020.

The company’s forecast for this year has it slated to generate enough cash flow to cover its 6%-yielding dividend — which it intends to increase by 3% this year — and its entire $1.3 billion expansion program, with about $870 million left over.

$750 million of that money could be used on opportunities such as repurchasing shares, the company said during the call. 

KMI is in the early stages of investing in and pivoting toward lower-carbon energy sources, which suggests that there may be years of stability and growth opportunities for the company.

The energy sector was the best-performing sector in the S&P 500 last year and has been off to a strong start in 2022. Energy is favored during periods of inflation and rising rates due to its historic resiliency and overall stability.

The Alerian Energy Infrastructure ETF (ENFR) holds KMI in its top 10 holdings. 

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