As of June 9, 2025, Kinder Morgan Inc's estimated intrinsic value ranges from $19.65 to $30.68 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $30.58 | +8.7% |
| Discounted Cash Flow (5Y) | $30.68 | +9.0% |
| Dividend Discount Model (Multi-Stage) | $24.11 | -14.3% |
| Dividend Discount Model (Stable) | $20.32 | -27.8% |
| Earnings Power Value | $19.65 | -30.2% |
Is Kinder Morgan Inc (KMI) undervalued or overvalued?
With the current market price at $28.14, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Kinder Morgan Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.8 | 0.81 |
| Cost of equity | 7.5% | 9.4% |
| Cost of debt | 5.1% | 7.5% |
| Tax rate | 20.8% | 21.7% |
| Debt/Equity ratio | 0.51 | 0.51 |
| After-tax WACC | 6.3% | 8.2% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $31 | $101,097M | 82.2% |
| 10-Year Growth | $31 | $100,874M | 66.2% |
| 5-Year EBITDA | $22 | $81,731M | 78.0% |
| 10-Year EBITDA | $24 | $85,344M | 60.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $5,474M |
| Discount Rate (WACC) | 8.2% - 6.3% |
| Enterprise Value | $66,879M - $86,301M |
| Net Debt | $32,929M |
| Equity Value | $33,950M - $53,372M |
| Outstanding Shares | 2,222M |
| Fair Value | $15 - $24 |
| Selected Fair Value | $19.65 |
| Metric | Value |
|---|---|
| Market Capitalization | $62528M |
| Enterprise Value | $95457M |
| Trailing P/E | 24.20 |
| Forward P/E | 21.26 |
| Trailing EV/EBITDA | 11.10 |
| Current Dividend Yield | 410.69% |
| Dividend Growth Rate (5Y) | 2.00% |
| Debt-to-Equity Ratio | 0.51 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $9.17 |
| Discounted Cash Flow (5Y) | 25% | $7.67 |
| Dividend Discount Model (Multi-Stage) | 20% | $4.82 |
| Dividend Discount Model (Stable) | 15% | $3.05 |
| Earnings Power Value | 10% | $1.96 |
| Weighted Average | 100% | $26.68 |
Based on our comprehensive valuation analysis, Kinder Morgan Inc's weighted average intrinsic value is $26.68, which is approximately 5.2% below the current market price of $28.14.
Key investment considerations:
Given these factors, we believe Kinder Morgan Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.