Lanny’s Recent Purchase – KMI (Again…)

Well, well… the iron strikes again on the same pipeline stock.  One couldn’t resist the aftermath throughout last week and I had to end the month of October on a strong point.  Heck, even Bert purchased additional shares into Kinder Morgan (KMI) at the end of October.  Looks like I had to end the month of October with a bang, and with a bang I did.

Kinder Morgan Inc. (KMI)

Yes, you read the title right.  Kinder Morgan has been added AGAIN back to my portfolio, and this is after I purchased the stock a week prior on 10/22 and here I was, buying them again on 10/26 during the day.   I purchased the stock on 10/22 at $29.29 per share… well, Mr. Market thought differently and dropped the stock again by over 5%!  Well, I hate my rule or I love my rule… maybe it is one of those love/hate relationships, but since it dropped 5%+, it caught my eye again as another great opportunity to average down, especially after they increased their dividend by another 2 cents per share per quarter going forward.  I owned 100 shares going into October 26th and thought I was good with my position, I should have thought differently… I scooped up another (drumroll)… 36 shares!  Yep, 36 more damn shares.  One would have thought I could have reduced my trading fees by purchasing through Robinhood, a brokerage service platform that we recently reviewed (But I love my service provider that much more).

Further, I am am expecting a 5-7% growth rate going forward for their dividend going into 2016, as I recently described in my last purchase article on them two weeks ago.  My entry point was even better, and similarly – this is one of the reasons why a downturn is good for a dividend investor – buying more dividend income for less!  See my stock summary below for the important details on my purchase, extremely excited for November (the next quarter dividend!).  

KMI Stock Purchase Summary

I purchased midday on October 26, 2015 36.00 shares at $27.71 per share + commissions of $6.95.  Total cost = $1,004.51.  Dividend Income added at $2.04 per share per year, 36 X $2.04 = $73.44 added.  This is a decrease of 5.4% from purchasing them at $29.29 a week prior.  Total shares of Kinder Morgan (KMI) owned now stands at ~136 shares in my portfolio, which now produces a forward annual amount of over $277 of dividend income per year.  At the price of approximately $30 per share, that is close to 9.25 new shares added per year, which would add $18+ going forward upon reinvestment at the analyzed price of $30.  Loving this!  Also, if 2016 brings 5% growth to the dividend, $277 would turn into $290 and so forth… without including new dividend reinvested shares throughout the period.  Also, forgot to mention, at $2.04 in dividends per year at a purchase price of $27.71, this yield was at 7.36% going forward (5 year average yield is 4.40%… aka 300 basis points over that almost… WHOA).  Therefore, the yield was higher than my weighted average yield, as well as the dividend growth of 15.91% was higher than my weighted average dividend growth.  One last piece of icing – my first purchase price was approximately $32.45, 2nd price at $29.29 and now this third version at $27.71.  Therefore, the stock dropped roughly 14.6% from the first time I purchased KMI last year.  Love to average down my cost this way, add more yield for less money (again…one of the reasons why a downturn is good for a dividend investor).   Further, adding over $73 dividend income add allowed me to cross the $6,500 mark which aims me closer to my $6,750 projected dividend income goal by the end of the year, still have a mountain to climb, but this pipeline is helping me get there.

\What does everyone think of this dividend stock purchase of KMI?  Think this was a good purchase?  Would you buy?  What else are you seeing?  Thank you for coming by and as always – appreciate your input and comments.  Talk soon!

-Lanny

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7 thoughts on “Lanny’s Recent Purchase – KMI (Again…)

  1. Lanny,
    KMI has a ton of its revenue guaranteed. They are essentially well paid middle men, and to go around them is a bigger pain for those involved in their various energy sectors. Its a great thing to be a part, I hope we see it continue to work for us for a long time.
    – Gremlin
    Long KMI

  2. Awesome purchase Lanny. One of my Core holdings for sure as I own 658 shares of KMI. I have full trust in Richard Kinders abilities and believe he’ll lead us to victory. No regrets. I like Pipelines and the need for them to transport is a must. I’d rather throw 20k into Kinder Morgan than buy a used car which only depreciates to nothing years from now. So all good.
    Thank you for sharing and keep up the great work. For a youngin, you’re already successful my friend. By 30 years old, you’ll gonna be a baller. ( You already are with 6500 a year in passive income at such a young age!?) I promise you if you keep it up.
    Take care my friend.

    • Hustler,

      Thank you for coming by. 658 shares?!??! aka 1,342.32 in forward income from them?? That’s aweosme hands down.

      Pipelines are awesome and the need is there – no doubt. Haha I love the analogy for buying a car – I’d buy a stock any day over a used car.

      30 years old… man, in 2.5+ years.. I hope I can be halfway where you are son. YOU are the one killing it – man, you’re on the fast path man! Let’s keep at it Hustler.

      -Lanny

  3. Good purchase, Lanny and Bert! You guys are killing it. I’ve bought KMI several times last few weeks and would pull the trigger again, if price drops. Its a great time to be buying KMI at these price points and hope to be happy shareholders 🙂 Keep racing towards FI!

    • R2R,

      Thanks for coming by. We are trying hard, that’s for sure, to hit our goals, buy strong companies and increase the forward looking income. Nice job pulling the triggers on KMI, they are awesome — keep a look out on healthcare REITs at this time — looking very opportunistic (O, HCP, etc.).

      Thanks again and let’s keep racing.

      -Lanny

  4. Lanny,
    Congrats on the purchase and being one step closer to your projected income goal for the year! That 7%+ yield is tough to pass up. In the short term I think we are going to see a bit more volatility before the energy sector can work itself out. I’m a fellow shareholder (I’m a bit overweight in it too) and I don’t think you and I will regret our investments 10 years from now.
    -FwF

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