Discount compared to historical valuation
Currently, Kinder Morgan (KMI) is trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of nearly 12x—lower compared to its five-year average multiple of ~17x.
Discount relative to peers
Kinder Morgan’s forward EV-to-EBITDA is also lower compared to nearly 14x for both Enterprise Products Partners (EPD) and Plains All American Pipeline (PAA). However, it’s comparable to ONEOK’s (OKE) multiple.
The above graph compares KinderMorgan’s forward EV-to-EBITDA multiple with selected peers. So, KinderMorgan seems to be trading at a discount compared to its own historical valuation as well as relative to its peers.
Kinder Morgan’s yield
In comparison, the Alerian MLP ETF (AMLP) is trading at a yield higher than 7%, while the SPDR S&P 500 ETF (SPY) yields nearly 2%. The energy sector forms nearly 6.6% of the S&P 500 Index (SPX-INDEX).
To learn more about Kinder Morgan’s 1Q17 performance, read Kinder Morgan’s 1Q17 Net Income Falls 9%, Misses Estimates.