Jim Cramer’s 10 Stock Picks You Shouldn’t Miss

6. Kinder Morgan Inc. (NYSE:KMI)

Number of Hedge Fund Investors: 41

Jim Cramer revisits Kinder Morgan Inc. (NYSE:KMI), a favorite of his from 2005 to 2010. Kinder Morgan Inc. (NYSE:KMI), a major energy pipeline company, operates similarly to a toll road, meaning it doesn’t rely heavily on fluctuating oil or gas prices. Instead, it benefits from steady growth in domestic energy production, which has been strong for years. Cramer notes that while Wall Street anticipates rate cuts, Kinder Morgan Inc. (NYSE:KMI)’s fundamentals remain solid. With a strong yield and a reliable track record, it is a strong long-term investment in the pipeline sector, especially as rates decrease.

“This energy pipeline play was a big favorite of mine from 2005 to 2010. Pipeline operators like Kinder Morgan operate like toll roads, meaning they aren’t heavily leveraged to the price of oil or gas. While KMI does have some exposure, it primarily benefits from domestic energy production growth, which has been strong for the past two decades.

While I like Enbridge with its 7.27% yield, it’s not part of the S&P 500. Instead, we’ll focus on Kinder Morgan, which offers the 10th highest yield in the S&P 500 at 5.37%. Despite oil and gas prices pulling back from their highs, Kinder Morgan’s stock has continued to perform well, up more than 21% this year with minimal drama.

Wall Street is anticipating rate cuts, but the fundamentals are solid—this is a great long-term operator in the pipeline space with a very attractive yield that will become even more appealing as rates decrease.”

Kinder Morgan Inc. (NYSE:KMI) is showing strong growth potential due to impressive performance and strategic initiatives. Kinder Morgan Inc. (NYSE:KMI)’s natural gas gathering volumes increased by 10% year-over-year, driven by higher production in the Haynesville and Eagle Ford regions. Although a minor decrease in volumes is expected for 2024, this is seen as temporary.

In the products pipeline segment, refined product volumes rose by 2%, while crude and condensate volumes remained stable. The $150 million upgrade of the Double H Pipeline system to handle natural gas liquids underscores Kinder Morgan Inc. (NYSE:KMI)’s focus on meeting market demands and seizing new opportunities. The terminals segment is thriving with high leased liquid capacity and strong utilization at key locations, and the CO2 segment has optimized its asset portfolio through strategic transactions, preparing for future CO2 flood projects and carbon capture initiatives.

Financially, Kinder Morgan Inc. (NYSE:KMI) is solid, as evidenced by a 2% increase in its dividend, reflecting strong performance and a commitment to returning value to shareholders. Kinder Morgan Inc. (NYSE:KMI) reported $3.57 billion in revenue for the quarter and saw a significant rise in gross margin.