This High-Yielding Natural Gas Stock Delivered High-Octane Growth in 2025, With More Ahead in 2026 and Beyond

Kinder Morgan (NYSE: KMI) is a leader in gas infrastructure. It handles about 40% of all the gas produced in the U.S. through its network of pipelines. These assets generate stable cash flow underpinned by fee-based contracts and government-regulated rate structures to support the company's more than 4% yielding dividend.

While dividend income is one of Kinder Morgan's major attractions, the company also has a high-octane growth engine. That was on full display last year, when the company produced robust financial results that should continue.

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A record year

Kinder Morgan recently closed the book on 2025 by reporting its fourth-quarter and full-year financial results. The gas pipeline company posted a record $2.9 billion or $1.30 per share of adjusted income last year, up 13% from 2024's level. Kinder Morgan also generated a record $8.4 billion of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) last year, 6% above 2024's level. Fueling that growth was the record-setting performance of its natural gas pipeline segment, where earnings jumped nearly 9% to $5.9 billion.

The company generated $5.9 billion in cash flow from operations last year. That covered its capital spending (over $3 billion) and dividend payments ($2.6 billion), leaving nearly $300 million to spare. That enabled it to maintain a strong balance sheet. It ended the year with a 3.8 times leverage ratio, putting it in the lower half of its 3.5-4.5 times target range. These metrics mean its high-yielding dividend is on a rock-solid foundation.

The fuel to continue growing

Kinder Morgan expects its adjusted earnings will rise to $1.36 per share in 2026, a 5% increase from last year. Meanwhile, it expects to produce about $8.6 billion of adjusted EBITDA, nearly 3% above 2025's level. This earnings growth will enable the company to raise its dividend by 2% in 2026, marking its 8th straight year of dividend increases. Meanwhile, the company expects to maintain a strong balance sheet, with it on track to end 2026 with a comfortable 3.8 times leverage ratio. This outlook included the recently closed sale of its 25% interest in BPX Gathering for nearly $400 million.

The company has lots more growth ahead. It ended the year with a robust backlog of $10 billion in growth capital projects. Kinder Morgan added $912 million of new projects last quarter, more than offsetting the $265 million of projects placed into service. The company has projects in the backlog with completion dates through 2030, including three large-scale gas pipelines that should start entering commercial service next year. These projects will give Kinder Morgan more fuel to grow its earnings and dividend.

Cashing in on surging gas demand

Kinder Morgan continues to capitalize on the acceleration in gas demand, fueled in part by AI data centers. It delivered record results last year and has plenty of fuel to continue growing its earnings and dividend. That puts the company in a strong position to produce high-octane total returns going forward.

Matt DiLallo has positions in Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy.