08-17-2014, 12:31 AM
I think KMI represents about the best initial yield plus expected dividend growth in the energy sector right now. It may not have quite the length of track record as an XOM or COP, but the old KMP has an 18 year streak with a 10 year CAGR of the dividend of 7.4%. The combined company the new KMI is projected to pay out $2.00 per share, a nearly 5% yield, with 10% annual increases expected out to 2020.
With the company focusing on the toll road of oil and gas pipelines for the majority of their revenues, the long term agreements they have provide a steady stream of income so there is less volatility than with E&P companies.
That said, to your original question I own COP while I do not own XOM. I like COP's higher focus on North American drilling, which takes some of the risk away from dealing with foreign governments and potential war disruptions. They have also shown much better growth over the last decade and you get to start with a higher initial yield.
Finally, one other oil stock that I own that you could consider is Occidental Petroleum (OXY). They also have a bit higher yield and much higher dividend growth rate, and have nice acreage in the US. They will be splitting off their California portion of the business late 2014/early 2015 and are also looking for buyers for their Middle East assets.
With the company focusing on the toll road of oil and gas pipelines for the majority of their revenues, the long term agreements they have provide a steady stream of income so there is less volatility than with E&P companies.
That said, to your original question I own COP while I do not own XOM. I like COP's higher focus on North American drilling, which takes some of the risk away from dealing with foreign governments and potential war disruptions. They have also shown much better growth over the last decade and you get to start with a higher initial yield.
Finally, one other oil stock that I own that you could consider is Occidental Petroleum (OXY). They also have a bit higher yield and much higher dividend growth rate, and have nice acreage in the US. They will be splitting off their California portion of the business late 2014/early 2015 and are also looking for buyers for their Middle East assets.