Kinder Morgan is under siege. Shares of the energy pipeline giant, whose shares show up in many portfolios seeking dividends, were slammed in heavy trading last week, falling $7, or 29%, to $16.82 and fell another 2% on Monday, amid growing concerns that the Houston-based company may have to cut its quarterly dividend, now 51 cents, to shore up its leveraged balance sheet. Kinder Morgan stock (symbol KMI) is down 60% this year while the Alerian MLP index is off a painful 42%.
Citigroup analyst Faisel Khan put out a note this week titled “Debt Rating at Risk, Dividend Cut Possible Amid Limited Options.” He wrote that the company needs to cut debt to maintain its investment-grade debt rating: “The most expeditious way of achieving this would be to reduce the dividend by around 40%, allowing the firm to retain about $1.9 billion per year, rather than paying out so much revenue in dividends. Steve and Sinclair review a Barrons report.
In the Q & A segment, real estate attorney Stephanie Wilson, partner in the law firm Stoops, Denious, Wilson, and Murray joins the A-Team to review what can go wrong when buying or selling investment properties run by Home Owners Associations with too many investors rather than residents.