Saturday, October 20, 2012

Dividend Mantra's Recent Buy - Kinder Morgan (KMI)

As promised, I'm publishing my second recent purchase. I'm generally fairly inactive in the stock market, casually watching the market move up and down when I can. I stay fairly busy throughout the workday, so I can't really watch the market's sways to and fro...and wouldn't much want to even if I had the time. But, this week will likely be my only activity for the entire month of October, unless there is a major price drop in some attractive dividend growth stocks allowing me ample opportunity. 

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

I purchased 40 shares of Kinder Morgan Inc. (KMI) on 10/9/12 for $35.22 per share. This purchase gives me a 3.98% yield on my price. I originally initiated a position with KMI last month, and was anxious to add to my holdings on pullbacks. Although this purchase is only at a price of about 1% lower than my initial purchase, I talked at length in my last article as to why I'm such a fan of this business and why I think it's attractively valued. Buying it at an even lower price makes it even more attractive.  

One of the key points to remember about this company is that they are mostly shielded from commodity price fluctuations, as volatile as they can be. As they mainly operate the pipelines that transport natural gas, petroleum and other energy commodities, and terminals that store these and other products, the price of these goods matters little. Think of it as your local toll highway. They are going to charge you $1.25 to cross that highway whether the gasoline that's propelling your car down the road costs $3.50 or $4.00 per gallon.

This purchase adds $56.00 to my annual dividend total based on the current payout.

With this recent buy I still have 29 positions in my portfolio.

Some analyst opinions on my recent purchase:

*Morningstar currently rates KMI as a 3/5 star valuation.
*S&P currently rates KMI as a 4/5 star Buy.

I'll update my Freedom Fund in early November to reflect my recent addition.

Full Disclosure: Long KMI

What are you buying?

Thanks for reading.

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