The entire energy sector has been going through a fierce sell-off over the last four months, in contrast to the broad market, which has been hovering around its all-time highs. Kinder Morgan (KMI) has not escaped the sell-off and thus it is now offering a 4-year high dividend yield of 8.5%. During sell-offs, most investors view such an abnormally high dividend yield as a signal of an imminent dividend cut. However, the dividend of Kinder Morgan is safe.
The pandemic has caused a severe recession in the U.S. Consequently, many companies have gone out of business and thus the total commercial demand for natural gas has decreased this year. However, it is critical to note that the effect of the coronavirus crisis on the natural gas market is much smaller than the effect on the oil market. The Energy Information Administration [EIA] expects the average annual U.S. demand