Democrat incumbent Barack Obama won re-election on Tuesday over the Republican contestant Mitt Romney, reported the Associated Press. Obama obtained at least 303 of the required Electoral College votes over Romney’s 206, with the required number for victory at 270. Democrats also maintained their Senate majority while Republicans kept the majority at the House of Representatives.
The Democratic presidential victory brings attention to natural gas pipelines. The President in the past has praised domestic natural gas as a cleaner energy source, as reported by Reuters.
In a recent interview, Deutsche Bank Securities Analyst Curt Launer shared his top oil and natural gas pipelines. Launer is an Institutional Investor Best Analyst of All Time and a Hall of Fame member.
Kinder Morgan (KMI) is one of Launer’s top picks. “KMI, I think, has extraordinary and visible growth for the next several years based upon its recently completed acquisition of El Paso. What El Paso brings to Kinder Morgan is $17 billion worth of assets that qualify for MLP treatment that will be dropped down from KMI to KMP, the Kinder Morgan-related master limited partnerships. This generates, in turn, large growth and distributions at KMP and significant cash flows to KMI through the operation of the MLP and the incentive distribution rights structure,” Launer said.
Launer also says his models show KMI growing its common share dividend at “13% per year for the next several years, very visibly, very reliably and without much commodity risk at all.” His target price is $45.
He highlights Enbridge (ENB), the largest transporter of oil in and around North America and the largest transporter of oil from Canada to the U.S, saying ENB is moving the majority of the oil out of the Bakken Shale. “All of these things translate into Enbridge having a $15 billion backlog of projects to build to move that oil in pipelines around North America, and the largest percentage of that capital investment is going on a strictly long-term contract fee-for-service basis, making double-digit earnings growth and strong dividend growth at Enbridge very reliable. The stock is currently about $41 and our ‘buy’ rating target is $46.”
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