Should i own kmr or kmp

However, due to high levels of depreciation there's also an effective tax deferral for taxable ordinary income. The merger ends that deferral, and individual owners' tax bills will come due this year. From our vantage, we think the merger offers a compelling proposition and expect KMI shares to appreciate faster than either MLP would have without the deal, but we acknowledge that this is a total return, and not an income, viewpoint.

Not a Premium Member? Charles St, Baltimore, MD Pipelines and midstream operations typically are pretty boring subjects, as far as Wall Street is concerned.

But the past few years at pipeline kingpin Kinder Morgan Inc. The approach is a radical one — taking out the lucrative MLPs in the name of boosting shareholder value — but it does show that Kinder Morgan still has plenty of gas left in the tank.

One of the cool things about Kinder Morgan is its size. Growth is there, but it has slowed. The combination of Kinders will mean an abandonment of the lucrative tax structure that Kinder Morgan helped popularize back in the s — ironically enough, at a time when everyone else is jumping on the MLP bandwagon.

Already, KMI has been forced to add some not-as-lucrative or instantly accreditive assets — like oil tankers — to its mix due to its higher cost of capital. By essentially getting rid of the MLPs, KMI will be able to cut its cost of capital and use its shares in an acquisitions. Over the longer haul, Kinder Morgan will be able to buy more assets, increase earnings and cash flows and pay out higher dividends. People buy MLPs for a host of reasons, but the two biggest are deferring taxes and high income.

First, the tax bite of exchange could sting. Open Income Statement. Balance Sheet. Cash Flow. Historical Prices. Advanced Charting. Company Info. Key People. Board of Directors Data temporarily not available. All Executives Data temporarily not available. Average Growth Rates. Insider Trading. Most Recent Insider Transactions Data temporarily not available.

Ownership Mutual Funds that own Data temporarily not available.