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Kinder Rises as Improving Dividend Outlook Spurs Upgrades

  • Company writes down value of Midcontinent Express pipeline
  • Project backlog, 2016 capital budget plan both reduced
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Kinder Morgan Inc. climbed more than 3 percent after billionaire founder Rich Kinder said the pipeline owner’s favored use for any future excess cash is dividend increases, rather than share buybacks or new projects.

Kinder’s comments during a conference call after U.S. equity markets closed on Wednesday prompted at least three analysts to upgrade the stock. The Houston-based company’s debt-reduction efforts and moves to fund operations with cash flow instead of borrowed money may allow it to start boosting payouts as soon as 2018, said Tristan Richardson, an analyst at SunTrust Robinson Humphrey.