12 Best Dividend Stocks Under $25

3. Kinder Morgan, Inc. (NYSE:KMI)

Number of Hedge Fund Holders: 43

Share Price as of June 21: $19.6

Kinder Morgan, Inc. (NYSE:KMI) ranks third on our list of the best dividend stocks under $25. It is one of the largest energy infrastructure companies in North America, which owns and operates oil and gas pipelines and terminals. In June, Wells Fargo upgraded the stock to Overweight with a $22 price target, expecting growth in the company’s storage and pipeline segments. The firm highlighted the company’s favorable positioning to capitalize on multiple expansion opportunities. This was also seen in the company’s recent earnings report. It indicated an expected rise in demand for natural gas, specifically in electric generation. This increase will be driven by expanding operations in artificial intelligence, cryptocurrency mining, and data centers. The company views this growing demand as a significant contributor to its future growth prospects.

Kinder Morgan, Inc. (NYSE:KMI) is a solid bet for dividend investors, offering a steady stream of income to them. The company continues to meet its cash flow targets and objectives as planned. In the first quarter of 2024, the company generated over $1.2 billion in operating cash flow and its free cash flow was $570 million. Its dividend growth streak spans over seven years, which makes KMI one of the best dividend stocks on our list. The company’s quarterly dividend comes in at $0.2875 per share for a dividend yield of 5.72%, as of June 21.

Kinder Morgan, Inc. (NYSE:KMI) also reported a 7% year-over-year increase in its adjusted EBITDA. The company closed the quarter with a net Debt-to-Adjusted EBITDA ratio of 4.1 times, demonstrating its capability to handle debt obligations effectively. With a current debt-to-equity ratio of 1.01, the company expects to reduce its net Debt-to-Adjusted EBITDA ratio to 3.9 times by the end of 2024. Looking ahead, it forecasts an 8% year-over-year growth in adjusted EBITDA to reach $8.16 billion for FY24. Despite these positive metrics, the stock is trading at a forward P/E multiple of 15.58, which appears somewhat conservative considering its earnings growth and full-year outlook.

Of the 920 hedge funds tracked by Insider Monkey at the end of Q1 2024, 43 hedge funds owned stakes in Kinder Morgan, Inc. (NYSE:KMI), up from 42 in the previous quarter. These stakes are collectively valued at more than 41.1 billion. Among these hedge funds, FPR Partners was the company’s leading stakeholder in Q1.