News of Kinder Morgan Energy Partners LP's better-than-expected 2010 dividend estimate prompted an analyst to upgrade his rating for the energy transportation and storage company on Tuesday.
On Monday after the closing bell, Kinder Morgan said it expects to pay out an annual cash dividend of $4.40 per unit in 2010, up from $4.20 per unit this year. Chairman and CEO Richard D. Kinder also said the Houston company expects to invest about $1.5 billion in expansions and small acquisitions in 2010.
Morgan Keegan analyst John Edwards said the dividend forecast exceeded his forecast of $4.36 per unit. This translates to a $62 to $65 stock price by the end of 2010, or a 10 percent to 14 percent appreciation from Monday's close, he said, adding that the current stock value presents an attractive entry point.
Edwards raised his rating to "Outperform" from "Market Perform."
Shares of Kinder Morgan rose 37 cents to $57 in premarket trading. The stock has traded in a 52-week range of $40.19 to $57.65.