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Dividend Growth Investing Recap – 8/12/2014

I’m back! As some of you may know, I went to Montreal this past weekend. All I can say is wow, what an amazing trip! Truly a beautiful and unique city. If you haven’t had a chance to check it out, I highly recommend it. As for the video today, I had to keep it short and sweet. My voice was giving out all day at work and I didn’t want to stress it too much further. Hopefully it gets better and I’ll have a full length video for you guys starting tomorrow.

Since I had to keep it short, only one stock I wanted to discuss. Kinder Morgan Inc (KMI) is one of the largest pipeline companies in North America and on Monday, KMI  announced they would be consolidating all of their companies under KMI. This will be a $44 billion transaction and comes with a 16.3% annual dividend increase.  The reasoning behind this is to decrease borrowing expenses and expand its pipeline network through acquisitions and new construction.

It makes sense though. KMI is a Master Limited Partnership (MLP), which is great for rapid expansion and quick growth. But, once you reach a certain size (like KMI) the cash payments to the general partner start eating up cash that can be used elsewhere. However, MLP’s are different than ordinary publicly traded stocks. There are some caveats you need to be aware about.  I go into more depth in the video, but dividends from MLP’s are classified differently and do require you to fill out a K-1 among other things.

Well, enough of my rambling. Enjoy the video!

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