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Kinder Morgan Has Outperformed Top Midstream Stocks in 2019

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KMI in 2019

Kinder Morgan (KMI) stock has outperformed its top midstream peers so far in 2019. The stock is up roughly 28% year-to-date compared to the ~24% rises of both Williams Companies (WMB) and ONEOK (OKE). Enterprise Products Partners (EPD) and Energy Transfer (ET) stocks are up ~16% and 12%, respectively.

Top C corporations Kinder Morgan, Williams Companies, and ONEOK have outperformed MLPs Enterprise Products Partners and Energy Transfer, reflecting a similar trend in the space in 2019.

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Kinder Morgan has also outperformed the broader energy sector ETF, the Energy Select Sector SPDR ETF (XLE), in 2019. The ETF has risen ~10% so far in 2019. Kinder Morgan’s outperformance may partially be attributed to its relatively large operations, superior performance, and lower risk compared to many XLE constituents. Kinder Morgan’s net income rose 15% year-over-year in the first quarter of 2019.

Analysts’ recommendations

Out of the total 21 Reuters-surveyed analysts covering Kinder Morgan, six have rated it as a “strong buy.” Ten analysts have rated it as a “buy,” four have rated it as a “hold,” and one has rated it as a “strong sell.” The average price target for Kinder Morgan is $21.7, implying a potential upside of ~10% from its current price.

As the graph above shows, fewer analysts are calling Kinder Morgan a “buy” or a “strong buy” now than in March. Its mean price target has, however, marginally increased over the last two months.

Moving averages

Kinder Morgan stock seems to have found support near its 50-day moving average. Its 14-day relative strength index of ~48 indicates that it may trade relatively stable in the near term.

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