Kinder Morgan, Inc. (KMI): A Top Energy Dividend Stock for 2025

Kinder Morgan, Inc. (KMI) has emerged as one of the most attractive energy dividend stocks in the current market, offering a compelling combination of growth, income, and strategic positioning. With a strong dividend history, robust project backlog, and a focus on natural gas infrastructure, KMI is well-positioned to capitalize on growing demand from LNG exports, power generation, and emerging sectors like AI data centers.

Strong Dividend History and Growth

KMI has a history of paying and increasing dividends, with a current annualized dividend of $1.15. In 2024, the company approved a Q4 dividend of $0.2875 per share, representing a 2% increase over Q4 2023. This consistent dividend growth is attractive to income-oriented investors, as it provides a steady and growing income stream.

Robust Project Backlog and Strategic Expansion

KMI has a strong project backlog of $8.1 billion, up nearly 60% from Q3 2024. This backlog is expected to generate an average Project EBITDA multiple of approximately 5.8x, indicating strong returns potential. The projects are underpinned by long-term contracts, providing revenue stability and visibility.

One of KMI's most strategic expansion projects is the $1.7 billion Trident Intrastate Pipeline Project, which will connect Katy, Texas to the Port Arthur LNG corridor, adding 1.5 Bcf/d of capacity through 216 miles of pipeline. This project, combined with the expanded Mississippi Crossing project (2.1 Bcf/d capacity) and South System Expansion 4, forms a comprehensive network targeting high-growth areas in natural gas demand.



Growing Demand for Natural Gas and Strategic Positioning

KMI's focus on natural gas infrastructure positions it well to capitalize on growing demand from LNG exports, power generation, and emerging sectors like AI data centers. The company expects demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for LNG exports and an almost 50% increase in natural gas exports to Mexico.

KMI's strategic expansion projects, such as the Trident pipeline, are particularly advantageous given the surge in LNG export demand, power generation needs, and emerging high-energy consumers like AI data centers. The $640 million Outrigger acquisition in North Dakota adds immediate value with its 270 MMcf/d processing facility and extensive gathering system, strengthening KMI's midstream capabilities in a key production basin.

Healthy Balance Sheet and Experienced Management Team

KMI's balance sheet remains solid, with a Net Debt-to-Adjusted EBITDA ratio of 4.0x, expected to improve to 3.8x by end-2025. This financial strength allows the company to fund growth projects and maintain its dividend payout. KMI's management team has a proven track record of executing on growth projects and delivering value to shareholders, further enhancing the company's appeal as an investment opportunity.

In conclusion, Kinder Morgan, Inc. (KMI) is one of the best energy dividend stocks to buy right now, offering a compelling combination of growth, income, and strategic positioning. With a strong dividend history, robust project backlog, and a focus on natural gas infrastructure, KMI is well-positioned to capitalize on growing demand from LNG exports, power generation, and emerging sectors like AI data centers. Investors seeking a stable and growing income stream, combined with exposure to the growing natural gas market, should consider adding KMI to their portfolios.