Kinder Morgan Stock: Big Yield Now, Bigger Upside in 2026
Kinder Morgan’s (NYSE: KMI) stock price is well-positioned to deliver a double-digit upside in addition to its high yield in 2026. The October price pullback has the market trading near the bottom of a long-term range, where support has been strong, with results, guidance, and analyst trends pointing to a robust upside. The critical factor is the company’s focus on natural gas.
Natural gas’s low price, increasing availability, and significance to decarbonization have made it in high and growing demand.
This is good news for Kinder Morgan because it makes its money on volume and long-term contracts, both of which are increasing, providing high visibility into cash flow and capital return reliability.
Kinder Morgan’s capital return is attractive. The company maintains a fortress balance sheet, self-funds its many growth projects, and returns the bulk of its free cash flow to shareholders. That equates to a dividend yield of more than 4.2% as of late October, and there is also an expectation of distribution growth.
The company’s earnings are growing in tandem with its expansion, allowing it to sustain a modest but reliable low-single-digit distribution CAGR that may accelerate over time. The theory is that CapEx will slow over time as the network and industry mature, allowing the company to channel more of its cash flow to investors.
Kinder Morgan Pulls Back After Robust Quarter
Kinder Morgan had a robust quarter driven by its expanding pipeline network and strong demand. The company’s revenue grew by 12.5% to outpace MarketBeat’s reported consensus by nearly 500 basis points. The strength was driven by natural gas, products, and terminals businesses, which are all expected to remain strong in the upcoming quarters.
The only bad news is that adjusted earnings fell short of the consensus by a slim margin, but there is a mitigating factor: spending projects. However, these projects tend to deliver profitable growth, so they are not the red flags they might be. Weakness aside, adjusted EPS is up 16% year over year and is sufficient to sustain the capital return outlook.
Guidance is a factor to help support the KMI price over time. The company expects F2025 to deliver net income growth above its previously stated 8%, and its longer-term targets are more robust. The increase in demand for cleaner energy, the current project pipeline, and expected pipeline growth suggest double-digit earnings growth can be sustained.
Analysts and Institutions Buy Into Kinder Morgan's Capital Return Outlook
The analyst and institutional trends reveal these groups are buying into Kinder Morgan’s growth and capital return outlook. The analyst's data shows coverage increasing, the sentiment firm at Moderate Buy, and the price target revisions rising, with the consensus price target forecasting an 18% gain as of late October.
Because the trends are positive, a move into the high end of the range is likely, topping out at $38 or more than 40% upside from the critical support target. The institutions own over 60% of the stock and are making strong purchases in 2025, approximately $2 for every $1 in sales.
The chart action is mixed: KMI stock fell following the release, but a significant pullback is not expected. The market moved lower, but the MACD and stochastic reflect a market in which bearishness is diminishing and support is strengthening.
KMI shares may move sideways within their established range until a potent catalyst emerges, but a move below the low end at $26 is not anticipated. The likely scenario is that KMI stock moves to new highs in early 2026 and sets up for a sustained uptrend.
The long-term target is a retest of the all-time highs near $50, which may occur by 2028.
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