Key Takeaways
- Kinder Morgan raised its dividend 2% on Oct. 21, 2026, and its project backlog hit a record $14.4 billion; it yields 3.7% against Chevron’s 3.2%.
- Chevron’s dividend used 41% of its free cash flow over the twelve months to Sept. 30, 2026, and Kinder Morgan’s distributable cash flow covered its dividend more than 2x in fiscal 2025.
- Chevron grew its dividend 6% a year from fiscal 2020 to fiscal 2025, against 2% for Kinder Morgan, which carries far more debt.
- At those growth rates, $10,000 in either stock pays roughly $4,100 to $4,200 over the next 10 years, so the pick turns on which dividend can keep its pace.
Any income investor looking at energy right now has two very different checks to choose from. Kinder Morgan (KMI) raised its quarterly dividend 2% to $0.2975 a share on Oct. 21, 2026, alongside a record third quarter, and it yields 3.7%.
Chevron (CVX) yields less, at 3.2%. But it just produced $12.0 billion of free cash flow in the third quarter of 2026, up from $4.9 billion a year earlier, and kept its quarterly dividend at $1.78 a share.
If I can only buy one and hold it for the next 10 years, which one gets my money?
| Metric | Chevron (CVX) | Kinder Morgan (KMI) |
|---|---|---|
| Dividend yield | 3.2% | 3.7% |
| Annual dividend | $7.12 | $1.19 |
| Dividend growth, fiscal 2020-2025 | 5.8% a year | 2.2% a year |
| Coverage, last reported | 41% cash dividend payout ratio (TTM to Sept. 30, 2026) | 2.1x distributable cash flow coverage (fiscal 2025) |
| Net debt / EBITDA (LTM) | 0.5x | 4.1x |
| Interest coverage (LTM) | 25.2x | 3.0x |
| Forward P/E (NTM) | 12x | 21x |
Source: TIKR and StockAnalysis, Nov. 5, 2026.
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Chevron has room to spare, for now
Chevron’s dividend is well-covered today, eating up just 41% of free cash flow over the twelve months to Sept. 30, 2026. Most of that cushion comes from the third quarter, when its U.S. refineries ran a record 1.09 million barrels a day and Chevron cut its debt by $3.5 billion.
The longer record is bumpier. Free cash flow fell short of the dividend in fiscal 2016, 2017 and 2020, and the dividend took 77% of it in fiscal 2025:
Chevron kept raising through those lean years anyway, for 39 consecutive years by its count on the third-quarter call. CFO Eimear Bonner said on that call that “the first priority … is to grow the dividend consistently.” With net debt at just 0.5x EBITDA, it can afford to mean that.
On Oct. 6, 2026, Chevron also agreed to swap its Hess Midstream stake and DJ Basin crude pipelines for better Bakken contract terms and $200 million in cash, a deal that takes about $3.7 billion of Hess Midstream’s debt off its books.
The risk is that Chevron’s cash rises and falls with oil and gas prices.
Kinder Morgan is building
Kinder Morgan pays the bigger check, and its distributable cash flow covered that check a healthy 2.1x in fiscal 2025. Third-quarter adjusted EBITDA rose 9% from a year earlier to $2.18 billion.
The backlog jumped to a record $14.4 billion on Oct. 21, from $9.6 billion a quarter earlier. “No concerns here about our ability to grow long term over the next 3 to 5 years,” CEO Kimberly Dang said on the call.
Distributable cash flow per share went from $2.02 in fiscal 2016 to $2.42 in fiscal 2025, while the dividend went from $0.50 to $1.17:
That $0.50 came after a cut. Kinder Morgan paid $1.60 a share in fiscal 2015, and its $1.17 for fiscal 2025 is still below that.
Building is expensive, too. Management expects about $4 billion a year of capital spending for the next few years, and free cash flow after capital spending and dividends came to just $230 million through the first nine months of 2026.
So which dividend wins?
Chevron gets my dividend dollars for the next 10 years.
At each company’s 5-year growth rate, $10,000 in Chevron pays about $4,178 over the decade against about $4,086 for Kinder Morgan, and Chevron’s annual income passes Kinder Morgan’s around 2031.
On a $92 gap, I care more about whether each rate can last, and Chevron has far more room to keep raising. Kinder Morgan’s net debt has run between 4.4x and 5.0x EBITDA every year from fiscal 2021 to fiscal 2025:
With that debt and a $14.4 billion backlog to fund, I don’t see much room for raises beyond 2% a year.
This isn’t to say Kinder Morgan’s dividend is in trouble. Management’s own leverage measure, on adjusted EBITDA, stood at 3.5x at Sept. 30, the low end of its target range. If that backlog turns into cash flow, raises could speed up. It’s just that, over a decade, I’d rather own 39 straight years of raises backed by almost no net debt.
Management plans to lay out Chevron’s 2027 capital program in December, and that plan will show how much cash it expects to have left over for shareholders.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
