KMI vs PSX: Dividend Yield, Growth & Safety Comparison
Kinder Morgan, Inc. (KMI) and Phillips 66 (PSX) are both in the Energy sector, making them natural rivals for dividend investors. KMI edges ahead on yield at 3.77% versus PSX's 3.02%. For dividend growth, KMI leads with a 5-year CAGR of 9.6% versus PSX's 7.0%. PSX holds the edge in dividend safety with a "Safe" rating. PSX is a Dividend Contender with 13 years of consecutive increases.
Key Metrics Comparison
| Metric | KMI | PSX |
|---|
| Dividend Yield | 3.77% | 3.02% |
| Annual Dividend | $1.17 | $4.75 |
| 5-Year CAGR | 9.6% | 7.0% |
| Payout Ratio | 85% | 44% |
| Consecutive Years | 0 | 13 |
| Price | $32.20 | $159.16 |
Yield Comparison
Kinder Morgan, Inc. (KMI) currently yields 3.77%, which is solid for the broader market. That's 0.75% more than Phillips 66 (PSX), which yields 3.02%. In dollar terms, KMI pays $1.17/share annually versus PSX's $4.75/share.
Dividend Growth
Over the past five years, KMI has grown its dividend at a 9.6% CAGR compared to PSX's 7.0%. KMI: Dividend growth is accelerating — the 3-year CAGR of 17.2% exceeds the 5-year rate of 9.6% and the 10-year rate of 13.4%. PSX: Dividend growth is slowing — the 3-year CAGR of 6.3% trails the 5-year rate of 7.0% and the 10-year rate of 10.8%.
Dividend Safety
KMI's dividend safety is rated "At Risk." The payout ratio of 85% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.2x. PSX's dividend safety is rated "Safe." The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x. PSX's payout ratio of 44% is more conservative than KMI's 85%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in KMI generates approximately $377/year in dividend income, compared to $302/year from PSX — a difference of $75/year. At $100,000, that gap widens to $750/year.
Verdict
- Best for income: KMI
- Best for growth: KMI
- Best for safety: PSX
Frequently Asked Questions
Which has a higher dividend yield, KMI or PSX?
Kinder Morgan, Inc. (KMI) has a higher dividend yield of 3.77% compared to Phillips 66 (PSX) at 3.02%.
Is KMI or PSX a better dividend growth stock?
Kinder Morgan, Inc. has the stronger dividend growth with a 5-year CAGR of 9.6%, compared to Phillips 66's 7.0%.
Which is safer for dividend income, KMI or PSX?
Kinder Morgan, Inc.'s dividend safety is rated "At Risk" while Phillips 66 is rated "Safe." The payout ratio of 85% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.2x. The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
How much income does $10,000 in KMI vs PSX generate?
A $10,000 investment in KMI generates approximately $377/year in dividends, while the same amount in PSX generates about $302/year.
Is KMI or PSX a Dividend Aristocrat?
Phillips 66 is a Dividend Contender with 13 consecutive years of increases. Kinder Morgan, Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, KMI or PSX?
Phillips 66 has a lower payout ratio of 44% compared to Kinder Morgan, Inc.'s 85%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
KMI vs PSX: which is better for retirement income?
It depends on your priorities. KMI for current income, KMI for dividend growth, PSX for safety. Many retirement investors hold both for diversification.
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