Plains All American Pipeline: A Better Midstream Infrastructure Play Than Kinder Morgan

Kinder Morgan, a midstream infrastructure company with a $62 billion market cap, is known for its natural gas infrastructure in the US. However, Plains All American Pipeline (NYSE:PAA) is a better buy, offering a more attractive valuation and growth prospects. Plains has a smaller market cap of $10 billion and is also a midstream infrastructure company, but with a stronger focus on crude oil infrastructure. It has a higher dividend yield and has been consistently growing its revenue and earnings.

Plains All American Pipeline, L.P. (NASDAQ: PAA) has emerged as a more attractive investment opportunity compared to Kinder Morgan (NYSE: KMI), particularly for investors seeking high-yield dividends and growth prospects in the midstream infrastructure sector. Kinder Morgan, with a market capitalization of $62 billion, is well-known for its natural gas infrastructure in the United States. However, Plains All American Pipeline offers a more compelling valuation and growth potential, with a smaller market cap of $10 billion and a stronger focus on crude oil infrastructure.

On June 17, 2025, Plains All American Pipeline announced an agreement with Keyera Corp to sell its Canadian NGL business for approximately C$5.15 billion, expected to close in Q1 2026. This transaction will allow Plains All American to focus on its crude oil operations in North America and optimize its financial flexibility [1]. Following the announcement, multiple analysts have increased their price targets on the stock. Mizuho raised its target from $20 to $22, while J.P. Morgan increased its target from $19 to $20, both while maintaining their respective ratings [1].

Plains All American Pipeline's dividend yield stands at 8.30%, significantly higher than Kinder Morgan's yield of approximately 3.50% [3]. Additionally, Plains All American has consistently grown its revenue and earnings, making it a more attractive investment for those seeking stable income and growth potential. The company's strong dividend growth record, with a 16-year streak of increasing payouts at a compound annual rate of 9%, further supports its appeal [3].

While Kinder Morgan has a broader scope of operations, including natural gas infrastructure, Plains All American's focus on crude oil infrastructure and its recent strategic moves position it favorably for investors seeking a more specialized and potentially higher-yielding investment in the midstream sector.

References:
[1] https://finance.yahoo.com/news/plains-american-sale-boosts-dividend-131601425.html
[2] https://fxdailyreport.com/wti-crude-oil-bounces-off-session-lows-to-trade-at-about-68-56/
[3] https://www.aol.com/3-top-high-yield-dividend-070300374.html