Based in Houston, Kinder Morgan (KMI) is the largest energy infrastructure company in North America; it owns and operates more than 84,000 miles of pipelines and 153 terminals, observes Mark Skousen, editor of High-Income Alert.

Its pipelines transport natural gas, petroleum, crude oil, carbon dioxide and more. It also stores a variety of other products, including gasoline, jet fuel, ethanol, coal and steel.

Kinder likens its business to a giant toll road. It receives fees from major oil companies, other energy producers and shippers and local distributors. That allows it to avoid commodity price risk. It also invests billions in new energy infrastructure to maintain and expand existing assets.

Lower oil prices have constrained new exploration and development. But they are stoking demand, not reducing it. Sales of big cars, SUVs and boats are up, not down.

I estimate that Kinder will earn $1.06 a share this year and nearly $1.50 a share in 2020. And that may be too conservative.

At least, Co-Founder and Executive Chairman Richard Kinder seems to think so. He has purchased $50.5 million worth of the stock in the last two months to bring his total holdings — both personally and through a limited partnership — to more than 250 million shares. (Now that’s what I call eating your own cooking.)

It is no mystery why Kinder is piling into the stock. Given the company’s projected growth, it is cheap at just 18 times prospective earnings and only 1.3 times book value. It also yields an attractive 4.2%. I expect an excellent total return here in the weeks and months ahead.

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