Exxon Mobil Corporation (XOM), Kinder Morgan Energy Partners LP (KMP) – Powering America’s Future: How You Can Profit

Buy and hold forever!!!

For the income investors there is even a play for you in this burgeoning sector. Kinder Morgan Energy Partners LP (NYSE:KMP) is a member of the Kinder Morgan Inc (NYSE:KMI) family.

This pipeline and storage company recently suffered a 10% pullback from record highs. This could be the buying opportunity patient investors have been waiting for.

Over the last five years it’s no fluke that a solid base accumulation trend line has developed. Two main reasons for this would be a generous yield combined with a Dividend Reinvestment Play (DRIP) and a strong parent company with no need to dilute or sell shares.

Kinder Morgan Energy Partners LP (NYSE:KMP) currently has a 6.15% yield and a track record of increasing dividends. In fact the last five quarters all saw consecutive dividend increases adding nearly 15% to the existing yield.

A Return on Assets (RoA) of 5.60% of is better than the industry average of 3.10%. The RoI of 6.40% is also greater than the industry average of 4.60%. This has lead to superior growth vs. competitors.

If energy is the lifeblood of modern industry, Kinder Morgan Energy Partners LP (NYSE:KMP) is the vascular system. An indispensable part of modern industry that has high barriers to entry, assured demand, and a reliable income stream, make this stock one of my top buy and hold picks.

Conclusion

Natural gas use will assuredly increase in the coming years. But there are several ways to capitalize on this sector. For the safe investor it seems Exxon Mobil Corporation (NYSE:XOM) offers stability with minimal but increasing exposure to this sector. The more aggressive trader might appreciate the recovery potential of Chesapeake Energy Corporation (NYSE:CHK). While the dividend oriented investor might appreciate a high yield of Kinder Morgan Energy Partners LP (NYSE:KMP). No matter the investing strategy, there is a stock for you and therefore no reason to be left behind in this energy revolution.

The article Powering America’s Future: How You Can Profit originally appeared on Fool.com and is written by James Catlin.

James Catlin has no position in any stocks mentioned. The Motley Fool recommends Kinder Morgan. The Motley Fool owns shares of Kinder Morgan and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. James is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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