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Analyzing Kinder Morgan’s Leverage

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Dec. 4 2020, Updated 10:53 a.m. ET

KMI’s leverage

Kinder Morgan’s adjusted net debt-to-adjusted EBITDA ratio stood at 4.5x at the end of 2018. The company expects to maintain this ratio at 4.5x at the end of 2019.

A company’s debt-to-EBITDA ratio is often used to assess its ability to repay debt. It’s commonly used by credit rating agencies to determine a company’s credit rating. A lower ratio is considered better.

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Credit ratings

In December, Moody’s upgraded Kinder Morgan’s senior unsecured rating from Baa3 to Baa2. According to the agency, proceeds from Kinder Morgan Canada will help reduce Kinder Morgan’s debt and improve its 2019 leverage.

In January, Standard & Poor’s upgraded Kinder Morgan’s issuer rating from BBB- to BBB. The graph above shows the improvement in Kinder Morgan’s leverage over the years. Kinder Morgan has repurchased shares worth $525 million under its $2 billion buyback program, which it approved in 2017.

Learn how Kinder Morgan’s valuation compares with its peers’ in Will KMI, WMB, and OKE Maintain Their Rally?

To learn about Kinder Morgan’s stock performance and its technical indicators, refer to Market Realist’s Energy and Power page.

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