uploads/2016/10/kmi-is-up-39-percent-ytd-1.jpg

Where KMI Is Trading in Relation to Its Moving Averages

By

Updated

Year-to-date rise

Kinder Morgan (KMI) has risen 39.0% since the start of 2016. In comparison, Enterprise Products Partners (EPD), ONEOK (OKE), Enbridge Energy Partners (EEP), and Energy Transfer Partners (ETP) have risen 6%, 104%, 13%, and 7%, respectively, in the same period.

The Alerian MLP ETF (AMLP), a fund for the top infrastructure MLPs, has risen nearly 4.0%. So KMI stock has outperformed the MLP sector so far in 2016.

Article continues below advertisement

KMI is trading below its 50-day moving average

Kinder Morgan currently trades 4.8% below its 50-day moving average and 11.8% above its 200-day moving average. Its 50-day moving average crossed above its 200-day moving average in August 2016.

Like other midstream companies, KMI has been on an uptrend since February 2016. KMI stock has shown a high correlation with crude oil prices, especially in the last couple of years. This trend is likely to continue. The above graph shows KMI’s stock price and its 50-day and 200-day moving averages.

Capital projects

KMI’s growth capital forecast for 2016 is ~$2.8 billion, which is $500 million lower than its budget of ~$3.3 billion. KMI expects a net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of ~5.3x for 2016.

In the company’s 2Q16 earnings release, president and CEO (chief executive officer) Steve Kean said, “We continue to drive future growth by completing significant infrastructure development projects in our sizable project capital backlog. Our current project backlog is $13.5 billion, down from $14.1 billion at the end of the first quarter of 2016.”

Next, let’s see what Wall Street analysts are recommending for Kinder Morgan ahead of its 3Q16 results.

Advertisement

More From Market Realist