Goldman Sachs Sees Continued Upside in U.S. Energy Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy KMI?
Source: seekingalpha
- Strong Energy Sector Performance: The S&P 500 Energy sector (XLE) has surged approximately 23% year-to-date, contrasting with a mere 1% gain in the broader market, indicating a significant investor shift towards cyclicals amid rising oil prices and improved growth expectations.
- Buy-Rated Stocks Identified: Goldman Sachs has pinpointed 10 stocks rated as 'Buy', projecting an average total return potential of about 19%, including HF Sinclair, ConocoPhillips, and EQT, highlighting substantial investment opportunities despite the sector's robust performance.
- Driving Factors for Growth: Key drivers behind the rally include positive GDP revisions, a broad rotation out of technology stocks, and geopolitical uncertainties that support crude prices, collectively bolstering investor confidence in the energy sector.
- Future Outlook: Goldman anticipates a free cash flow inflection for ConocoPhillips as major projects ramp up, while companies like Kinder Morgan and Cheniere Energy in the midstream and LNG sectors are expected to benefit from contracted cash flows and project backlogs, ensuring strong earnings visibility.
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Analyst Views on KMI
Wall Street analysts forecast KMI stock price to fall
14 Analyst Rating
8 Buy
6 Hold
0 Sell
Moderate Buy
Current: 31.690
Low
27.00
Averages
31.62
High
36.00
Current: 31.690
Low
27.00
Averages
31.62
High
36.00
About KMI
Kinder Morgan, Inc. is an energy infrastructure company. The Company owns an interest in or operates approximately 79,000 miles of pipelines and 139 terminals. Its Natural Gas Pipelines segment includes ownership and operation of interstate and intrastate natural gas pipeline and storage systems and natural gas gathering systems and natural gas processing and treating facilities. Its Products Pipelines segment includes ownership and operation of refined petroleum products, crude oil and condensate pipelines that primarily deliver, among other products, gasoline, diesel and jet fuel, crude oil and condensate to various markets, plus the ownership and/or operation of associated product terminals and petroleum pipeline transmix facilities. Its Terminals segment includes ownership and/or operation of liquid and bulk terminal facilities and Jones Act-qualified tankers. Its CO2 segment is engaged in the production, transportation and marketing of CO2 to oil fields.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of High-Quality Pipeline Stocks
- Oneok Dividend Advantage: Oneok boasts a dividend yield exceeding 5%, significantly higher than the S&P 500's 1.1%, and has nearly doubled its dividend over the past decade, demonstrating robust payout capabilities supported by stable cash flows and long-term contracts.
- Financial Stability: Oneok plans to allocate less than 85% of its stable cash flow to dividends, maintaining a strong financial profile with a target leverage ratio of 3.5 times, which supports its organic expansion projects, including an LPG export terminal and a gas pipeline expected to enter commercial service in 2028.
- Kinder Morgan's Growth Potential: Kinder Morgan currently has a 3.7% dividend yield and expects to raise its payout by about 2% this year, marking its ninth consecutive year of dividend increases, reflecting its ongoing investments in expansion projects and strong financial health.
- Investment Choice Comparison: Oneok offers a higher current dividend yield, making it suitable for income-focused investors, while Kinder Morgan presents greater growth potential, appealing to those seeking higher total returns.
See More
Analysis of High-Yield Stocks in the Pipeline Sector
- Oneok Dividend Growth: Oneok expects to grow its dividend by 3% to 4% annually, currently yielding over 5%, significantly higher than the S&P 500's 1.1%, which positions it well to attract income-seeking investors supported by stable cash flows.
- Kinder Morgan Dividend Performance: Kinder Morgan anticipates a 2% increase in its dividend this year, marking its ninth consecutive year of increases; although its yield is 3.7%, its lower payout ratio (around 50%) allows for funding future expansion projects.
- Financial Stability Comparison: Oneok targets a leverage ratio of 3.5 times and is undertaking several organic expansion projects, including the construction of an LPG export terminal and a gas pipeline, expected to enter commercial service by 2028, enhancing its long-term growth potential.
- Investment in Expansion Projects: Kinder Morgan has a $10 billion project backlog expected to be completed by Q2 2030, which will drive strong earnings growth while enabling continued dividend increases, showcasing its competitive edge in the pipeline sector.
See More
Kinder Morgan Shares Rise for Seven Consecutive Days
- Stock Performance: Kinder Morgan (KMI) shares rose 1% to $32.32 on Friday, marking seven consecutive days of gains and a 17% increase over the past month, reflecting strong market performance and investor confidence.
- Cash Flow and Dividend Growth: A recent Seeking Alpha analysis highlighted that Kinder Morgan leverages its irreplaceable U.S. energy infrastructure and dominant natural gas network to drive robust cash flow and dividend growth, further solidifying its position in the energy sector.
- Analyst Ratings: On Wall Street, 12 analysts rated KMI as Buy or higher, while 9 analysts recommended Hold and only 1 suggested Sell, indicating a generally optimistic outlook for the company's future performance.
- Future Demand Forecast: Kinder Morgan projects LNG feed gas demand to reach 19.8 Bcf/day by 2026, with a backlog advancing to $10 billion, signaling the company's growth potential and strategic positioning in the natural gas market.
See More
Goldman Sachs Sees Continued Upside in U.S. Energy Stocks
- Strong Energy Sector Performance: The S&P 500 Energy sector (XLE) has surged approximately 23% year-to-date, contrasting with a mere 1% gain in the broader market, indicating a significant investor shift towards cyclicals amid rising oil prices and improved growth expectations.
- Buy-Rated Stocks Identified: Goldman Sachs has pinpointed 10 stocks rated as 'Buy', projecting an average total return potential of about 19%, including HF Sinclair, ConocoPhillips, and EQT, highlighting substantial investment opportunities despite the sector's robust performance.
- Driving Factors for Growth: Key drivers behind the rally include positive GDP revisions, a broad rotation out of technology stocks, and geopolitical uncertainties that support crude prices, collectively bolstering investor confidence in the energy sector.
- Future Outlook: Goldman anticipates a free cash flow inflection for ConocoPhillips as major projects ramp up, while companies like Kinder Morgan and Cheniere Energy in the midstream and LNG sectors are expected to benefit from contracted cash flows and project backlogs, ensuring strong earnings visibility.
See More
Investment Opportunities in U.S. Pipeline Stocks
- U.S. Energy Production Surge: In 2025, U.S. oil production reached a record 13.6 million barrels per day, while natural gas production exceeded 37.7 trillion cubic feet in 2024, highlighting the U.S.'s dominant position in the global LNG market and attracting investor interest in stable pipeline stock returns.
- Enterprise Products Partners: EPD, one of the largest pipeline operators in the U.S. with over 50,000 miles of pipelines, is set to add 900 million cubic feet per day of new Permian gas-processing capacity by mid-2026, further solidifying its critical role in energy infrastructure.
- Kinder Morgan's Market Position: KMI accounts for about 40% of all natural gas transported in the U.S. with over 66,000 miles of pipeline, connecting major supply basins and demand centers, particularly benefiting from the power demand driven by AI data centers.
- Stable Dividend Yields: EPD has raised its dividend for 27 consecutive years, currently yielding 6.6%, while KMI offers a 3.89% yield, providing attractive options for investors seeking steady income.
See More
Insider Buying Activity at Kinder Morgan and Red River Bancshares
- Insider Buying at Kinder Morgan: Director William A. Smith purchased 3,000 shares of KMI at $29.75 each on Monday, totaling an investment of $89,236, indicating confidence in the company's future despite a 1.6% drop in stock price on Wednesday.
- Red River Bancshares Investment: Director Teddy Ray Price bought 747 shares of RRBI at $90.12 each on Wednesday for a total of $67,322, reflecting his confidence in the company's ongoing growth, with the stock rising 2.2% on the same day.
- Historical Purchase Record: Prior to this latest buy, Price had made four other purchases of RRBI over the past year, totaling $394,181 at an average price of $59.96 per share, demonstrating a long-term bullish outlook on the stock.
- Market Reaction Analysis: While Kinder Morgan's stock has seen a decline, insider buying is generally viewed as a positive signal for the company's future performance, potentially attracting more investor interest in the long run.
See More
Analysis of High-Quality Pipeline Stocks
- Oneok Dividend Advantage: Oneok boasts a dividend yield exceeding 5%, significantly higher than the S&P 500's 1.1%, and has nearly doubled its dividend over the past decade, demonstrating robust payout capabilities supported by stable cash flows and long-term contracts.
- Financial Stability: Oneok plans to allocate less than 85% of its stable cash flow to dividends, maintaining a strong financial profile with a target leverage ratio of 3.5 times, which supports its organic expansion projects, including an LPG export terminal and a gas pipeline expected to enter commercial service in 2028.
- Kinder Morgan's Growth Potential: Kinder Morgan currently has a 3.7% dividend yield and expects to raise its payout by about 2% this year, marking its ninth consecutive year of dividend increases, reflecting its ongoing investments in expansion projects and strong financial health.
- Investment Choice Comparison: Oneok offers a higher current dividend yield, making it suitable for income-focused investors, while Kinder Morgan presents greater growth potential, appealing to those seeking higher total returns.
See More
Analysis of High-Yield Stocks in the Pipeline Sector
- Oneok Dividend Growth: Oneok expects to grow its dividend by 3% to 4% annually, currently yielding over 5%, significantly higher than the S&P 500's 1.1%, which positions it well to attract income-seeking investors supported by stable cash flows.
- Kinder Morgan Dividend Performance: Kinder Morgan anticipates a 2% increase in its dividend this year, marking its ninth consecutive year of increases; although its yield is 3.7%, its lower payout ratio (around 50%) allows for funding future expansion projects.
- Financial Stability Comparison: Oneok targets a leverage ratio of 3.5 times and is undertaking several organic expansion projects, including the construction of an LPG export terminal and a gas pipeline, expected to enter commercial service by 2028, enhancing its long-term growth potential.
- Investment in Expansion Projects: Kinder Morgan has a $10 billion project backlog expected to be completed by Q2 2030, which will drive strong earnings growth while enabling continued dividend increases, showcasing its competitive edge in the pipeline sector.
See More
Kinder Morgan Shares Rise for Seven Consecutive Days
- Stock Performance: Kinder Morgan (KMI) shares rose 1% to $32.32 on Friday, marking seven consecutive days of gains and a 17% increase over the past month, reflecting strong market performance and investor confidence.
- Cash Flow and Dividend Growth: A recent Seeking Alpha analysis highlighted that Kinder Morgan leverages its irreplaceable U.S. energy infrastructure and dominant natural gas network to drive robust cash flow and dividend growth, further solidifying its position in the energy sector.
- Analyst Ratings: On Wall Street, 12 analysts rated KMI as Buy or higher, while 9 analysts recommended Hold and only 1 suggested Sell, indicating a generally optimistic outlook for the company's future performance.
- Future Demand Forecast: Kinder Morgan projects LNG feed gas demand to reach 19.8 Bcf/day by 2026, with a backlog advancing to $10 billion, signaling the company's growth potential and strategic positioning in the natural gas market.
See More
Goldman Sachs Sees Continued Upside in U.S. Energy Stocks
- Strong Energy Sector Performance: The S&P 500 Energy sector (XLE) has surged approximately 23% year-to-date, contrasting with a mere 1% gain in the broader market, indicating a significant investor shift towards cyclicals amid rising oil prices and improved growth expectations.
- Buy-Rated Stocks Identified: Goldman Sachs has pinpointed 10 stocks rated as 'Buy', projecting an average total return potential of about 19%, including HF Sinclair, ConocoPhillips, and EQT, highlighting substantial investment opportunities despite the sector's robust performance.
- Driving Factors for Growth: Key drivers behind the rally include positive GDP revisions, a broad rotation out of technology stocks, and geopolitical uncertainties that support crude prices, collectively bolstering investor confidence in the energy sector.
- Future Outlook: Goldman anticipates a free cash flow inflection for ConocoPhillips as major projects ramp up, while companies like Kinder Morgan and Cheniere Energy in the midstream and LNG sectors are expected to benefit from contracted cash flows and project backlogs, ensuring strong earnings visibility.
See More
Investment Opportunities in U.S. Pipeline Stocks
- U.S. Energy Production Surge: In 2025, U.S. oil production reached a record 13.6 million barrels per day, while natural gas production exceeded 37.7 trillion cubic feet in 2024, highlighting the U.S.'s dominant position in the global LNG market and attracting investor interest in stable pipeline stock returns.
- Enterprise Products Partners: EPD, one of the largest pipeline operators in the U.S. with over 50,000 miles of pipelines, is set to add 900 million cubic feet per day of new Permian gas-processing capacity by mid-2026, further solidifying its critical role in energy infrastructure.
- Kinder Morgan's Market Position: KMI accounts for about 40% of all natural gas transported in the U.S. with over 66,000 miles of pipeline, connecting major supply basins and demand centers, particularly benefiting from the power demand driven by AI data centers.
- Stable Dividend Yields: EPD has raised its dividend for 27 consecutive years, currently yielding 6.6%, while KMI offers a 3.89% yield, providing attractive options for investors seeking steady income.
See More
Insider Buying Activity at Kinder Morgan and Red River Bancshares
- Insider Buying at Kinder Morgan: Director William A. Smith purchased 3,000 shares of KMI at $29.75 each on Monday, totaling an investment of $89,236, indicating confidence in the company's future despite a 1.6% drop in stock price on Wednesday.
- Red River Bancshares Investment: Director Teddy Ray Price bought 747 shares of RRBI at $90.12 each on Wednesday for a total of $67,322, reflecting his confidence in the company's ongoing growth, with the stock rising 2.2% on the same day.
- Historical Purchase Record: Prior to this latest buy, Price had made four other purchases of RRBI over the past year, totaling $394,181 at an average price of $59.96 per share, demonstrating a long-term bullish outlook on the stock.
- Market Reaction Analysis: While Kinder Morgan's stock has seen a decline, insider buying is generally viewed as a positive signal for the company's future performance, potentially attracting more investor interest in the long run.
See More
