Wednesday, October 10, 2012

Recent Buy

This morning I picked up 55 shares of Kinder Morgan, Inc. (KMI) at $35.04 per share.  Assuming an annual dividend from KMI of $1.40 per share, based on the last quarterly payment of $0.35, my YOC for the position is 3.98%.  The 55 shares will provide an extra $77 annually before any dividend increases or reinvestment, with $19.25 being paid out this year in November assuming they follow the same payout schedule they've already established.  My forward 12 month dividends just breached the $1,000 mark with this purchase, sitting at $1,014 before any further dividend increases or reinvestment.  It's pretty exciting to finally cross that mark.
I went with KMI instead of the other Kinder Morgan family of investments because I feel it'll be much easier come tax time without having to deal with a K-1 from investing in a MLP.  And on top of that KMI shareholders get an increased dividend growth rate because of the incentive distribution rights (IDR) that the general partner holds over the limited partner.  KMI intends to increase dividends by 12% per year through 2015 which is an awesome growth rate for such a high starting yield.  I like the midstream pipeline's because they're essentially toll roads and don't have to worry about the price of oil/natural gas or finding it.  They just transport it.  I believe the recent acquisition of El Paso is only going to help them in the long run.  Another reason that I invested here is that Richard Kinder is an excellent CEO and one that any investor wants to have on their side.

I got a little impatient with the purchase and would have hit my original limit order that I set last night.  But I changed it this morning to $35.04 and it hit.  I would have received the shares at $34.86, my original limit order price, but got a little worried about missing out on the shares at a price I was comfortable with.  In the long run that $0.18 won't even be noticeable and give it a few weeks and I'll completely forget it about it.  I should have just stuck with it but I have the shares now which is what I really wanted.

There's several other companies that are getting close to my entry points and with it being earnings season it's time to get some limit orders in.  I expect volatility to rise leading to great opportunities to get invested with solid companies whose stock price just took a hit.

*I meant to also add that my YOC for my FI portfolio increased from 2.60% to 2.68% with this purchase and that my Non-ESPP YOC increased from 3.13% to 3.20%.

8 comments:

  1. Great purchase! I really like KMI and am looking to initiate a position soon enough.

    In a few years, I'm certain you'll be reaping the rewards and growing dividends. The 0.18/share difference won't even register your memory.

    Cheers!

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    1. The $0.18/share just sticks out right now. Give it a week or so and I'll completely forget about it. I'm looking forward to being sided with Richard Kinder and the KM family of companies.

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  2. Great minds think alike -- I also bought KMI today. :)

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    1. And we almost both bought CMI as well. I just might be starting a position with CMI today.

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  3. PIP,

    Nice purchase. I first initiated a position with KMI last month and couldn't be happier. I think this will be a particularly strong dividend growth stock going forward.

    I also added to my position yesterday actually, so I missed the pullback today. Great stuff!

    Best wishes.

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    1. The DG should be great going forward. I like the fact that the commodity price isn't tied to their profitability. I think we'll both be very happy with our KMI positions.

      Thanks for stopping by!

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  4. Haha everyone seems to be joining this party! Either we are all evil geniuses or there is some big time group think going on. I'm pretty sure we'll be happy with KMI 5-10 years from now. Nice one!

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    1. Yeah it's pretty funny to see, it's about how NSC went about a month ago. Several posts within a few days of each other announcing buys. I certainly hope the DG continues at 10+% for several years to come.

      Thanks for stopping by!

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