High-Yield and High-Growth? This Energy Stock Backs Its 3.7%-Yielding Dividend With Booming AI-Driven Gas Demand.
2026-07-23 05:30
•Matt Dilallo •The Motley Fool
•••••••• ••• Axe Capital view
Energy Dividend with an AI Twist
Kinder Morgan's dividend yield and strong growth are backed by booming gas demand tied to LNG exports and AI data centers.
Kinder Morgan’s Q2 results remind us that energy infrastructure isn’t just about old-school pipelines anymore. The 32% jump in earnings per share, driven by natural gas used in LNG exports and AI-heavy data centers, points to a structural shift. Demand for clean(er) energy to power tech giants’ data needs isn’t just a fad—it’s a multi-year growth story. For South African investors, the company isn’t directly listed on the JSE, but its success reinforces the rand’s sensitivity to US energy markets. Strong exports and infrastructure spending in energy can support the rand, which has been under pressure. Locally, this view nudges me toward energy-related counters like Sasol, which stands to gain from robust oil and gas pricing and infrastructure demand. The risk? Energy transition policies could tighten quicker than expected, hurting fossil fuel demand. But given Kinder Morgan's backlog of projects and dividend history, this isn’t a short-term trade—it's a steady growth play. this is just my opinion and not financial advice
Buy Sasol selectively, focusing on its integrated energy exposure as it benefits from higher LNG and oil prices, while keeping an eye on rand strength. Avoid chasing Kinder Morgan via USD/ZAR moves alone given currency volatility.
- Sasol
- USD/ZAR
- Accelerated shift away from fossil fuels
- Volatility in global energy prices impacting rand and local energy stocks
7/10
Kinder Morgan reported strong Q2 earnings with adjusted EPS growing 32%, driven by increased natural gas demand from LNG exports, power generation, and emerging AI data center demand. The company expects to exceed its 2026 earnings guidance by 12% and has a $9.6 billion backlog of expansion projects plus $10 billion in additional opportunities under development. With 9 consecutive years of dividend increases and robust growth catalysts, the stock offers both high yield (3.7%) and growth potential.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Matt Dilallo
Categories: Rates, Equities, Earnings, Capital Returns, Commodities, Technology, AI, Semiconductors
Tickers: EP, EPPC, KMI
Sentiment: Positive - Strong Q2 earnings with 32% adjusted EPS growth, record net income, exceeding full-year guidance by 12%, robust backlog of $9.6 billion in projects, 9-year dividend growth streak, and emerging AI-driven demand catalysts providing long-term growth visibility through 2030.
Keywords: Kinder Morgan, natural gas pipeline, dividend growth, AI data centers, earnings growth, LNG demand, power generation, infrastructure expansion
Insights:
- EP: Positive: Strong Q2 earnings with 32% adjusted EPS growth, record net income, exceeding full-year guidance by 12%, robust backlog of $9.6 billion in projects, 9-year dividend growth streak, and emerging AI-driven demand catalysts providing long-term growth visibility through 2030.
- EPPC: Positive: Strong Q2 earnings with 32% adjusted EPS growth, record net income, exceeding full-year guidance by 12%, robust backlog of $9.6 billion in projects, 9-year dividend growth streak, and emerging AI-driven demand catalysts providing long-term growth visibility through 2030.
- KMI: Positive: Strong Q2 earnings with 32% adjusted EPS growth, record net income, exceeding full-year guidance by 12%, robust backlog of $9.6 billion in projects, 9-year dividend growth streak, and emerging AI-driven demand catalysts providing long-term growth visibility through 2030.