KMI vs PSX: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
KMI yields 0.75% more than PSX. In dollar terms, KMI pays $1.17/share vs PSX's $4.75/share annually.
Dividend Growth
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: 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: The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in KMI vs PSX today?
At $32.20 per share, $10,000 buys about 310.6 shares of Kinder Morgan, Inc. (KMI). Each share pays $1.17 per year in dividends, so the position starts out generating roughly $363 per year — about $30 a month.
At $159.16 per share, $10,000 buys about 62.8 shares of Phillips 66 (PSX). Each share pays $4.75 per year in dividends, so the position starts out generating roughly $298 per year — about $25 a month.
KMI is the larger income stream from day one: $65 per year more on the same $10,000 invested.
What could $10,000 of KMI or PSX income look like in 10 years?
Kinder Morgan, Inc. (KMI) has raised its dividend about 9.6% a year over the past five years. If that pace held, the $377 per year that $10,000 generates today at the current 3.77% yield would reach $940 per year by 2036 — a 9.4% yield on the original cost.
Phillips 66 (PSX) has raised its dividend about 7.0% a year over the past five years. If that pace held, the $302 per year that $10,000 generates today at the current 3.02% yield would reach $596 per year by 2036 — a 6.0% yield on the original cost.
On those trailing rates, KMI pays more in 2036: $940 versus $596 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would PSX's dividend growth overtake KMI's higher yield?
It doesn't, on the trailing numbers. Kinder Morgan, Inc. (KMI) yields more today (3.77% vs 3.02%) and has also grown its dividend at least as fast (9.6% vs 7.0% a year over five years). Unless PSX accelerates its raises or KMI stumbles, PSX never closes the income gap — KMI wins on both current income and growth.
Can KMI and PSX afford their dividends?
Kinder Morgan, Inc. (KMI) earns $1.37 per share against $1.17 paid out in dividends — 1.2x coverage (a 85% payout ratio).
Phillips 66 (PSX) earns $10.79 per share against $4.75 paid out in dividends — 2.3x coverage (a 44% payout ratio).
PSX's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for KMI if earnings weaken.
Which fits an early-retirement income portfolio better, KMI or PSX?
For income you need right now, Kinder Morgan, Inc. (KMI) leads: $100,000 invested today pays about $314 a month at the current 3.77% yield, versus $252 a month from Phillips 66 (PSX) at 3.02%.
KMI also leads on dividend growth (9.6% vs 7.0% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: PSX has raised its dividend 13 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,362/yr in KMI vs $802/yr in PSX by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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