13 Best Natural Gas and Oil Dividend Stocks To Buy

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

Number of Hedge Fund Holders: 43

Kinder Morgan, Inc. (NYSE:KMI) ranks seventh on our list of the best dividend stocks from the oil and natural gas industry. It is one of the largest energy infrastructure companies in North America, which owns and operates oil and gas pipelines and terminals. In its recent earnings report, the company announced that it expects an increase in demand for natural gas used in electric generation, particularly driven by the expanding operations in artificial intelligence, cryptocurrency mining, and data centers. This demand would contribute to the company’s growth.

Kinder Morgan, Inc. (NYSE:KMI) continues to generate cash flow in line with expectations and objectives. In the first quarter of 2024, the company’s operating cash flow came in at $1.2 billion and its free cash flow amounted to $570 million. This shows that the company’s ability to pay dividends remains secure. It currently offers a quarterly dividend of $0.2875 per share, having raised it by 2% in April 2024. Through this increase, the company stretched its dividend growth streak to seven years, which makes KMI one of the best dividend stocks on our list. The stock supports an impressive dividend yield of 5.79%, as of June 10.

In addition to its strong cash generation, Kinder Morgan, Inc. (NYSE:KMI) also reported a 7% year-over-year growth in its adjusted EBITDA. The company ended the quarter with a net Debt-to-Adjusted EBITDA of 4.1 times, which indicates its position to manage debt obligations. With a debt-to-equity ratio of 1.01, the company expects its net Debt-to-Adjusted EBITDA of 3.9 times by the end of 2024. The company also projects an 8% year-over-year growth in its adjusted EBITDA at $8.16 billion for FY24. The stock is trading at a forward P/E multiple of 15.50, which appears a little low given its earnings growth and full-year outlook.

On June 4, Wels Fargo upgraded Kinder Morgan, Inc. (NYSE:KMI)  to Overweight with a $22 price target, expecting growth in the company’s storage and pipeline segments. The firm said that the company is well-positioned to benefit from multiple expansions. KMI has delivered an 11.4% return to shareholders since the start of 2024.

At the end of March 2024, 43 hedge funds in Insider Monkey’s database owned stakes in Kinder Morgan, Inc. (NYSE:KMI), up from 42 in the preceding quarter. The consolidated value of these stakes is over $1.1 billion.