Kinder Morgan (KMI -1.6%) shares have jumped 28% YTD but will continue to attract investors focusing on the importance of returns over growth and as the company is able to highlight its financial flexibility, says Raymond James analyst Justin Jenkins in reiterating his Buy rating and $21 price target.
Jenkins says KMI's Q1 results, including adjusted EBITDA of $1.947B, were largely in-line with estimates while quarterly discounted cash flow of $1.371B topped expectations on the back of lower maintenance capex.
With KMI's strategic review process of its Canadian subsidiary still underway. Jenkins says management has three options: to run the subsidiary as a stand-alone business, sell it or decide on a strategic combination with another company.
Jenkins expects the stock to outperform over the next 12-18 months, with continued dividend growth, share buybacks and cash flow stability and growth into 2020.