John StephensonKinder Morgan EnergyKMPTOP PICKSep 06, 2002

Are in the perfect spot to power ever-growing data centres. Electricity demand from these centres will rise from 1-2% to 6-8% by 2030.

They reported fine numbers yesterday and guidance was in-line. Ho-hum, but shares jumped 3%.

Pays a 6.5% dividend and has a lot of cash flow.

On the pipeline side, generally speaking, valuations have gone up. If they can get the contracts they are usually “take or pay”, which reduces risks. Canadian pipelines would be a small part of their holdings. They have been backing down from their LP structure, which is seen as favourable. Dividends should grow in line with earnings with companies like this. More of a dividend story than capital appreciation.

Kinder Morgan Energy (KMP-N) or Kinder Morgan Mgmnt (KMR-N)? This is a big pipeline company in the US. You are really talking about owning the general partner or the limited partner. He would prefer this one, the limited partner, as there is less CapX risk. They just get the benefit of the growth of the limited partner.

Building out the infrastructure, pipelines and all those things, is a wonderful place to invest. Not early on this one. We are starting to see quite a decay. Five-year chart shows the last year has been weak. The best case scenario is that we find some support in the mid to low $70’s and we go sideways from there for a number of years. He would have on his radar for something you want to build a position in.

Are able to generate above average growth because they are involved with larger projects.