KMI

Kinder Morgan is executing well as a fee-based natural-gas transporter. FY2025 revenue rose 12.7% to $15.2B and net income jumped 17.0% to $3.06B, with diluted EPS up 17.1% to $1.37 — the best year in the five-year history (net income climbed steadily from $1.78B in 2021). Margins are robust for the model (31.1% operating, 20.1% net), and operating cash flow of $5.92B comfortably funds the $3.03B capex program, leaving roughly $2.9B of free cash that covers the $2.60B dividend about 1.1x. The 10-K's guidance for a 2026 dividend of $1.19/share (+2%) and ~$3.3B of expansion capex signals a stable, growing income stream with a visible reinvestment runway (e.g., the $648M Outrigger Williston-Basin gathering acquisition added contracted capacity).

The balance sheet is the cautionary counterweight. Long-term debt is $30.8B against $31.2B of equity (liabilities/equity 1.29x), and with only $63M of cash, net debt of ~$32B against ~$7.2B of operating income plus D&A implies roughly 4.5x leverage — manageable for a regulated-like pipeline but leaving little cushion if rates stay high or volumes soften. The deeply negative retained earnings (-$10.2B) reflect the legacy of paying out more than cumulative earnings, and ROE is a modest 9.8%, so this is a yield-and-stability story, not a compounder. Revenue is also lumpy because of commodity pass-throughs (it fell from $18.1B in 2022 to $13.5B in 2024 before recovering), which makes the headline 12.7% growth partly a price effect rather than pure volume.