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