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Kinder Morgan Stock: Big Yield Now, Bigger Upside in 2026
Written by Thomas Hughes. Published 10/27/2025.
Key Points
- Kinder Morgan is well-positioned for a natural gas demand boom.
- Low prices, decarbonization, and availability are driving factors for sustaining business in the long term.
- Analysts and institutions are buying into this cash-flow and capital-return machine.
Kinder Morgan's (NYSE: KMI) stock is well-positioned to deliver double-digit upside in addition to a high yield in 2026. The October pullback left the stock trading near the bottom of a long-term range, where support has been strong. Results, guidance and analyst trends point to robust upside — with the company's focus on natural gas a key driver.
Natural gas's relatively low price, increasing availability and role in decarbonization have driven growing demand.
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Click here to watch Jeff's urgent briefingThat's positive for Kinder Morgan because it earns revenue from volumes and long-term contracts — both rising — which provides 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 many of its 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, with expectations for distribution growth.
The company's earnings are growing alongside its expansion, allowing it to sustain a modest but reliable low-single-digit distribution CAGR that could accelerate. The expectation is that CapEx will moderate as the network and industry mature, enabling the company to direct more cash flow to investors.
Kinder Morgan Pulls Back After Robust Quarter
Kinder Morgan reported a robust quarter driven by its expanding pipeline network and strong demand. Revenue grew 12.5%, outpacing MarketBeat's reported consensus by nearly 500 basis points. Strength came from the natural gas, products and terminals businesses, which are expected to remain solid in upcoming quarters.
Adjusted earnings missed consensus slightly, largely due to spending on projects. Those projects tend to deliver profitable growth, so they are not red flags. Adjusted EPS is up 16% year over year and supports the capital-return outlook.
Guidance should help support the stock over time. The company expects FY2025 net income growth above its previously stated 8% target, and its longer-term objectives are more robust. Rising demand for cleaner energy, the active project pipeline and expected network growth suggest double-digit earnings growth could be sustained.
Analysts and Institutions Buy Into Kinder Morgan's Capital-Return Outlook
Analyst and institutional trends show growing confidence in Kinder Morgan's growth and capital-return profile. Coverage has increased, sentiment remains a Moderate Buy, and price-target revisions are rising; the consensus price target implied about an 18% gain as of late October.
With those trends in place, a move toward the high end of the range is plausible — targeting about $38, or roughly 40% upside from critical support. Institutions own over 60% of the stock and were net buyers in 2025, purchasing approximately $2 of stock for every $1 sold.
Chart action is mixed: KMI fell after the release, but a significant follow-through pullback is not expected. The MACD and stochastic indicators suggest diminishing bearishness and strengthening support.
KMI shares may trade sideways within the established range until a meaningful catalyst appears, but a drop below the low end near $26 is unlikely. The more likely path is renewed upside into early 2026, setting up a sustained uptrend.
The long-term target remains a retest of all-time highs near $50, which could occur by 2028.
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