That far more healthy steadiness sheet makes in the present day’s Kinder Morgan a a lot stronger firm than it was 5 years in the past. It is a lot stronger, in truth, that it was capable of improve its dividend by 5% within the midst of the COVID pandemic, even across the time oil was bottoming out at adverse costs. Whereas that improve was lower than the corporate had initially projected for the yr, that is actually only a signal that it is severe about defending its steadiness sheet and its long run viability.
Kinder Morgan’s dividend at the moment presents buyers a yield round 8.5%, and that yield is properly coated by the corporate’s working money flows. It does typically pay out greater than it studies as accounting earnings. That top earnings payout ratio is basically an artifact of the capital-intensive nature of the pipeline enterprise. The corporate’s investments in its infrastructure generate depreciation that hold earnings down regardless of its skill to generate money.
No. 3: A well being enterprise that is a lot larger than its title would possibly counsel
You would possibly know CVS Well being (NYSE: CVS) from its practically 10,000 retail shops. What you won’t know, nonetheless, is that its front-of-store operations characterize solely round 7.5% of the corporate’s complete income. The overwhelming majority of its money is generated from its different operations, together with pharmacy, medical health insurance, and long run care companies. That makes CVS Well being a bona fide healthcare titan, with its namesake shops extra a gateway into its ecosystem than the core of its enterprise.