Buffett Brain · Research note
Score updated 23 Oct 2026 · analysis from 16 May 2026
KMI· Energy
Kinder Morgan
Kinder Morgan's midstream assets provide stability, but high leverage and weak returns on capital raise concerns.
Buffett fit
Weak fit
Owner
39
Durability
82
Management
68
Price
42
Score updated 23 Oct 2026 · analysis from 16 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Energy stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Kinder Morgan entirely, our focus would be on managing the company's high debt levels, with a net debt/EBITDA ratio of 4.23, and improving capital efficiency.
The full reasoning comes with a free account.
Kinder Morgan's infrastructure assets provide a durable revenue stream, evidenced by consistent profitability over the past five years.
The full reasoning comes with a free account.
Kinder Morgan's shows a slight reduction in share count with a CAGR of -0.46%, but the yield is minimal at 0.24%.
The full reasoning comes with a free account.
With a of 22.4 and an earnings yield of 4.46%, Kinder Morgan's valuation appears stretched compared to the desired 8-10% yield.
The full reasoning comes with a free account.
Free account
Read the full Kinder Morgan analysis free
- The full reasoning behind all four pillars
- Graham, Lynch and Greenblatt on the same stock
3 full analyses a week · no card needed
For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 183,000 miles of pipelines provide scale advantages in the midstream sector.
- 2Stable cash flows from long-term contracts support consistent profitability.
- 3 of 28.61% indicates efficient operations.
- 4Net income of $3.06B shows strong cash generation capability.
Concerns
5- 1High net debt/EBITDA ratio of 4.23 indicates significant risk.
- 2 of 5.62% is below the 15% threshold for a wonderful business.
- 3Interest coverage of 2.8 is low, raising concerns about debt servicing.
- 4Current ratio of 0.52 suggests potential liquidity issues.
Price history
$33.72+101.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Kinder Morgan operates as an energy infrastructure company with a focus on natural gas pipelines, products pipelines, terminals, and CO2 operations. It owns approximately 83,000 miles of pipelines and 143 terminals, generating $16.95B in revenue with a net income of $3.06B. The company's business model relies on stable, fee-based cash flows from long-term contracts. Unit economics are challenged by a low of 5.62%, indicating limited .
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Energy
Free weekly email
Liked the read on KMI? Get the next ones on Monday.
Every Monday: the stocks most of the seven investors newly agree on. One email, unsubscribe any time.
Research, not investment advice.
See the Buffett analysis of Kinder Morgan
The score, the checklist and the full reasoning open with a free account. You get 3 full analyses a week, and this stock is the first one. No card needed.
Create a free account3 full analyses a week · no card needed
Already have an account? Sign in