Kinder Morgan just closed the books on its strongest year ever: record EBITDA, a 50% EPS spike, and a $10 billion project backlog that’s 60% tied to surging power demand—here’s why the pipeline giant is now a must-own for income and growth investors.
Record Quarter in Numbers
Kinder Morgan earned $996 million in attributable net income for Q4 2025, driving diluted EPS to $0.45—a 50% year-over-year leap. Even stripping out one-time gains, adjusted EPS still vaulted 22% as adjusted EBITDA climbed 6% to an all-time high, beating the company’s own 4% budget target.
Dividend Dynasty Strengthens
The board declared a $0.2925 quarterly dividend, lifting the annual payout to $1.17 per share—a 2% raise that extends KMI’s decade-long streak of cash-return growth. At yesterday’s close that yields 5.4%, nearly triple the S&P 500 average.
Balance-Sheet Flexibility Expands
Despite pouring almost $3 billion into growth projects and the $650 million Outrigger acquisition, net debt fell $9 million year-over-year and leverage ticked down to 3.8× EBITDA from 4.1× in March. S&P responded by upgrading the credit to BBB Positive, while Fitch moved the rating to BBB+.
The $10 Billion Growth Engine
Management replaced every dollar of 2025 in-service projects with fresh commitments, expanding the backlog from $8.1 billion to $10 billion. Roughly 60% of that capital is earmarked for power-sector infrastructure—think data-center feeders, plant interconnections, and renewable firming pipelines—locking in 20-year, investment-grade, take-or-pay contracts.
Capex Guide Re-loaded
The new floor for annual growth spending is $3 billion, up from $2.5 billion, fully funded from internally generated cash flow after dividends. Every 0.1× of de-levering frees up another $850 million of borrowing capacity, giving KMI room to green-light even more projects without stretching the balance sheet.
Segment Snapshot
- Natural Gas Pipelines: Transport volumes and ancillary services beat budget across Texas, Northeast, and Gulf Coast markets.
- Terminals: Liquids lease capacity held at 93%; Houston Ship Channel and Carteret, NJ utilization hit 99%; Jones Act fleet 100% contracted through 2026.
- CO₂: Full-year oil volumes dipped 2% but finished slightly above plan; management sees limited impact from Continental Resources’ Bakken drilling halt because Bakken EBITDA is only ~3% of the total.
What Management Said
On the call, CFO David Michels emphasized that all new projects—including the Western Gateway JV with Phillips 66—are expected to earn “significantly above our cost of capital” with long-term, credit-worthy shippers. President Tom Martin added that removal of FERC’s old 871 delay rule could accelerate in-service dates on major pipes like MSX by up to two quarters, although customers ultimately decide when to commence shipments.
Investor Takeaway
Kinder Morgan is no longer just a bond-proxy dividend play. The combination of record cash generation, falling leverage, and a power-hungry $10 billion backlog gives investors both high current income and a visible, inflation-protected growth runway. With rating agencies cheering and management pledging at least $3 billion in annual growth capex for the foreseeable future, KMI shares offer a rare blend of yield, momentum, and upside in the energy infrastructure space.
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