Same Yield, but No Comparison on Value: Chevron vs. Kinder Morgan

Investors have to make trade-offs every time they buy a stock. There's the balance between risk and reward from the specific investment they choose to own. But there's also an opportunity cost, because buying one stock usually means not buying another, perhaps similar, stock. This is where a comparison of Kinder Morgan (NYSE: KMI) and Chevron (NYSE: CVX) comes in today, with both of these dividend stocks offering yields of roughly 4% right now.Kinder Morgan operates in the midstream segment of the broader energy industry. That means that it owns vital energy infrastructure like pipelines, storage, and transportation assets. It is focused on North America, where the majority of its income comes from the fees that it charges to other companies for the use of its assets. The midstream is probably the most consistent cash-flow generator within the energy sector.Essentially, Kinder Morgan is a toll taker. Demand for oil and gas, and the other products transported through its system, is more important to its financial results than the price of oil and gas. Demand for energy tends to remain high even when prices are low because oil and natural gas are so vital to economic activity.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool