Kinder Morgan and TC Energy Compete on Yield and Dividend Growth
Kinder Morgan yields 3.7% and TC Energy yields 4.2%, but Kinder Morgan has grown its dividend faster over the past five fiscal years. Both midstream companies increased Q2 2026 EBITDA by 12%, and Kinder Morgan's distributable cash flow covered its payout 2.07x in fiscal 2025 versus 1.96x for TC Energy. TC Energy carries more debt, while Kinder Morgan's coverage is expected to widen in fiscal 2026.
Kinder Morgan's second-quarter 2026 growth came from natural gas: transport volumes rose 7% and gathering volumes 26%, aided by LNG deliveries, Mexican exports and power generation. Management expects to beat its 2026 budget on adjusted EBITDA and adjusted EPS, though its project backlog fell $500 million to $9.6 billion as projects entered service.
TC Energy's comparable EBITDA also rose 12%, including 28% growth in Mexico, with management targeting about 6% annual growth through 2028. Coverage has been uneven: it fell to 1.23x in fiscal 2024 before recovering to 1.96x in fiscal 2025, when the dividend was cut from C$3.70 to C$3.40.
Retail investors, income-focused retirees and pension funds holding these midstream stocks could see differing outcomes depending on whether dividends keep growing. Steadier coverage at Kinder Morgan may appeal to those prioritizing reliability, while TC Energy's higher yield could suit investors willing to accept greater leverage and currency exposure. Because both firms move natural gas tied to LNG exports, Mexican demand and power generation, their payout decisions may also influence how quickly energy infrastructure projects advance, with possible knock-on effects for consumers and communities near those assets.