Kinder Morgan is North America’s largest pipeline operator and is headquartered in Houston, Texas. It has a great history and its founder owns the Houston Texans football team. If you cast yourself back to December of last year the price of oil fell from close to $100 to $25 a barrel, it was a crisis for many oil companies. As a pipeline company, Kinder runs on debt to pay for the pipelines, when the price of oil fell, the debt was close to being downgraded and Kinder had to cut its dividend to ensure its credit rating did not fall. In crisis mode, Kinder had to cut costs as well as raise revenues and hope the price of oil increased. Fortunately all that has happened and Kinder Morgan is a leaner, more focused company which is profitable. In a report by Joe Carroll of Bloomberg News the shares have increased 80% which is why you need to know what the quality companies are. When they go down in price, that is the great opportunity to buy low and let your money grow at relatively low risk. Kinder is one of those success stories – an investment in January has doubled your money and it will continue to grow as investor payouts are expected to increase in the coming years.

Linking to dividend paying companies, whenever there is a commodity downturn companies shares will be effected, knowing which companies are the best of the breed or the top quality companies is your homework. It is important to know because most people have a balanced portfolio and there will be some effect from the commodity downtown. As the commodity price begins to rebound, that is the time to buy the quality companies for they  will rebound faster and you can make money with relatively low risk. The reason to buy dividend paying companies is the compounding effect over a long period of time. The ideal time to buy is when quality companies fall in price and rebound because they can turn their finances around and be a consistent profit maker.

There are more questions than answers, till the next time – to raising questions.