The energy sector is one that I broadly have avoided for quite some time, and have suggested that investors do the same (except for energy transportation/pipeline companies of course).
That said, as with anything in life, there are always exceptions to the rule. In this article, I’m going to discuss one Canada-focused energy play with a juicy dividend for aggressive dividend investors.
Kinder Morgan (NYSE:KMI) is the U.S. parent of the Kinder Morgan empire, with Kinder Morgan Canada separately listed in Canada. This company currently carries a 7.2% dividend yield at the time of writing, an incredibly juicy yield given the company’s reasonable payout ratio and stable position in its market.
The company has perhaps one of the most desirable upstream and downstream value propositions of its peers, with a decent payout ratio and a balance sheet which looks a lot better when compared to its peers in a sector that has been hit very hard.
The price of commodities has continued to rally, and in a heightened commodity price environment, I could see shares of Kinder Morgan rebounding significantly higher. This means that dividend investors may need to act fast to lock in this dividend yield which may not be around for too much longer.
There’s no reason to expect a dividend cut in the near-term, while I do think the resumption of dividend hikes over the medium-term is more likely, making this dividend play one which is likely undervalued at these levels.
Invest wisely, my friends.
