Pipeline plays have been attractive sources of yield and total return. Many of these outfits are structured as master limited partnerships, paying no taxes at the corporate level in exchange for flowing distributions out to unitholders, explains John Dobosz, income expert and editor of Forbes Dividend Investor.

Our new recommendation is not an MLP, but it does have large ownership stakes in several of them. Based in Houston, Kinder Morgan (KMI) owns an interest in, or operates, approximately 80,000 miles of pipelines.

Its pipelines transport natural gas, gasoline, crude oil, carbon dioxide, and other products. Its 180 terminals store petroleum products and chemicals, and handle ethanol, coal, petroleum coke, and steel.

KMI is the owner of the general partner and approximately 10% of limited partner interests in Kinder Morgan Energy Partners, LP (KMP), and it also owns the general partner and approximately 41% limited partnership interests in El Paso Pipeline Partners LP (EPB).

Revenue is expected to grow 13.6% to $16 billion, with per-unit earnings rising 18.2% to $1.36. Accounting earnings are far lower than the $4.29 per unit in cash flow from operations over the past 12 months.

This is an amount that easily covers $1.68 in annual dividends, which have been paid since the February 2011 IPO, after the company was taken private by management and private equity backers.

Over the past three years, KMI has traded for an average of 3.74 times revenue, suggesting a price of $54.50 per share if it regains that multiple.

As a multiple of operating cash flow, Kinder Morgan is also cheap, trading for 7.8 times operating cash flow per share, versus an average of 12.8 since 2011.

One final bit of information that clenches the decision to buy KMI is insider action. Chairman and CEO Richard Kinder just bought $3.2 million worth of KMI on May 9.

This comes on top of $38 million worth of buying by Kinder over the prior five months. Directors have also been big buyers.

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