03-28-2016, 09:44 AM
I have owned KMI for many years, and I think that the dividend cut is a good reminder to constantly look at the overall portfolio every now and then. KMI was a small (~3%) portion of my portfolio, so a 75% cut really only cut my dividend income by 2.25%. The majority of my portfolio is made up of the solid companies, like XOM and JNJ which were mentioned above. These companies increase their dividends each year by more than 2.25%, more than offsetting the KMI reduction.
One good thing for KMI is that they can pay down debt quicker now, with less cash going out the door to dividends. Over the next few years, their financial position will improve as debt declines.
One good thing for KMI is that they can pay down debt quicker now, with less cash going out the door to dividends. Over the next few years, their financial position will improve as debt declines.