Kinder Morgan, the largest refined petroleum products operator in North America, filed new documents with regulators today giving a little more color on its upcoming initial public stock offering. It set the size of the deal at 80 million shares and is telling us there will be 707 million shares outstanding after the offering. It didn’t give us a range yet for the size of the offering but this will clearly be a deal that places a market cap on the company at more than $10 billion. This blogger surmises that because one number the company did give was its expected dividend payout: $1.16 a year or a total of $820 million in dividend payouts.
If the market cap was $10 billion, that would be an 8.2% dividend payout – and we shouldn’t expect a dividend yield that high.
We get reminders each day how far the economy and corporate Americas has snapped back – at least part of the way – from the depths of our great recession. Starbucks, which not long ago was going through a soul-searching to re-identify itself and cut costs (it closed many stores), announced today it was paying its first ever dividend. It is a modest 10 cent a share dividend, which will end up costing the company about $75 million. But the steps it took to improve profitability over the past year have allowed it to amass enough cash to not only pay out a dividend but authorize a new stock buyback program. It has grown its cash position pretty impressively. It had $1.35 billion of cash and short-term securities on its books at the end of December. That was up from $666 million in the quarter that ended September. Look for more companies to do the same thing.
