How much will Kinder Morgan pay out in dividends this year?

At the current share price, Kinder Morganhis (KMI 0.33%) dividend yields more than 5%. That puts the pipeline giant among the top 10 highest-yielding dividend stocks in the S&P 500where the mean the yield is below 1.5%.

The pipeline operator can easily afford high yield payment. Here’s how much it will distribute in dividends this year.

Kinder Morgan’s quarterly dividend rate is $0.2875 per share ($1.15 annually). It is 2% higher than last year and made 2024 the seventh company Justice year of his pay increase. At this rate, Kinder Morgan will pay about $2.6 billion in cash dividends this year, up from about $2.5 billion in 2023.

While that’s a lot of money, it’s quite affordable for Kinder Morgan. The company is on track to generate $5 billion, or $2.26 per share, in distributable cash flow this year, 8% higher than the total in 2023. That puts dividend payout ratio around 51%.

That reasonably low payout ratio will allow it to retain about $2.4 billion in excess free cash flow this year — more than enough to fund its plan to increase capital spending by about 2 billion dollars annually. As a result, Kinder Morgan will also have excess free cash flow that it could use to opportunistically buy back shares or strengthen their already solid balance sheet. The company is about to end the year with a leverage ratio of 3.9 — in the lower half of its long-term target range of 3.5 to 4.5.

With growing cash flows and a conservative financial profile, Kinder Morgan is in a great position to continue growing its high-yielding dividend. For this reason, it is an ideal option for those looking for a sustainable and constantly growing stream of passive income.