Key Takeaways
- Kinder Morgan and TC Energy both grew second-quarter 2026 EBITDA 12%, and Kinder Morgan raised its dividend 2% in July.
- TC Energy yields 4.2% against Kinder Morgan’s 3.7%, but Kinder Morgan raised its dividend faster from fiscal 2020 to fiscal 2025, at 2.2% a year against 1.0%.
- Kinder Morgan’s distributable cash flow covered its dividend 2.1x in fiscal 2025, against 2.0x for TC Energy, which carries more debt.
- Whether each company can keep raising at its five-year pace decides which pays more over the decade.
Natural gas gave Kinder Morgan (KMI) a big second quarter. Adjusted EBITDA rose 12% in Q2 2026, and in July it raised its quarterly dividend 2% to $0.2975 a share.
TC Energy (TRP) grew comparable EBITDA by the same 12% on the same demand, and its stock yields more: 4.2% against Kinder Morgan’s 3.7%. Kinder Morgan, though, has raised its dividend faster, at 2.2% a year from fiscal 2020 to fiscal 2025 against 1.0% for TC Energy.
So if you put $10,000 into one of them today, which pays you more over the next 10 years?
| Metric | Kinder Morgan (KMI) | TC Energy (TRP) |
|---|---|---|
| Forward yield | 3.7% | 4.2% |
| Dividend, annual rate | $1.19 | $2.49 (US dollars at today’s exchange rate) |
| Dividend growth, fiscal 2020–2025 | 2.2% a year | 1.0% a year (in C$) |
| Distributable cash flow coverage, fiscal 2025 | 2.07x | 1.96x |
| Distributable cash flow coverage, fiscal 2026 consensus | 2.33x | 1.83x |
| Net debt / EBITDA (LTM) | 4.11x | 6.11x |
| Interest coverage (LTM) | 2.98x | 2.07x |
Kinder Morgan’s cushion keeps getting wider
Kinder Morgan’s growth is coming from natural gas. In Q2 2026, transport volumes rose 7% and gathering volumes rose 26% on LNG deliveries, exports to Mexico and power generation.
That growth is showing up in distributable cash flow, which covered the dividend a comfortable 2.07x in fiscal 2025. Analysts expect 2.33x in fiscal 2026, with distributable cash flow per share up 14% to $2.77. Management’s own outlook backs that up: it expects to beat its 2026 budget by more than 5% on adjusted EBITDA and by more than 12% on adjusted EPS.
Coverage has stayed between 1.86x and 2.22x every year since fiscal 2020, and the dividend rose every year from $0.50 a share in fiscal 2017 to $1.17 in fiscal 2025.
(That’s still below the $1.60 a share it paid in fiscal 2015.)
Executive Chairman Richard Kinder has said the strategy keeps “growing our dividend” while EBITDA grows “as these projects come online,” and the coverage gives him plenty of room to do it. The risk is the pace of growth. The backlog shrank $500 million from Q1 to $9.6 billion as projects went into service, so faster raises depend on Kinder Morgan sanctioning new projects.
TC Energy pays more up front
TC Energy is riding the same demand, with Q2 2026 EBITDA up 12% in the U.S. and 28% in Mexico. Management targets comparable EBITDA growth of about 6% a year from 2025 to 2028, at the midpoint of its range.
Distributable cash flow covered the dividend 1.96x in fiscal 2025. Consensus has a still-healthy 1.83x for fiscal 2026, as distributable cash flow per share dips 4% to C$6.43 and the dividend rises from C$3.40 to C$3.51.
The record is bumpier. Coverage slid from 2.36x in fiscal 2018 to a thin 1.23x in fiscal 2024. It then jumped to 1.96x in fiscal 2025, as distributable cash flow per share rose to C$6.68 and the dividend fell from C$3.70 in fiscal 2024 to C$3.40.
That drop is why the five-year growth rate reads just 1.0% a year.
TC Energy sets its dividend in Canadian dollars, so its US-dollar value moves with the currency. Canada also withholds tax on dividends paid to US holders.
The main risk is debt. TC Energy’s net debt runs 6.11x EBITDA, against 4.11x at Kinder Morgan, and its EBIT covers interest just 2.07x.
So which dividend wins?
TC Energy pays you more over the next 10 years. At its 1.0% five-year rate, $10,000 in TC Energy pays $420 a year now and about $4,388 over the decade. The same $10,000 in Kinder Morgan, growing at 2.2% a year, pays about $4,086. That’s about $302 more from TC Energy, and Kinder Morgan’s yearly income wouldn’t pass TC Energy’s until about 2037. (TC Energy’s income is figured in Canadian dollars, so a US holder’s checks also move with the exchange rate.)
For me, 1.0% a year is a low bar for TC Energy to clear. Its dividend is covered 1.83x on consensus, its EBITDA is targeted to grow about 6% a year, and the C$3.51 consensus for fiscal 2026 already beats that pace. To close the gap within 10 years, Kinder Morgan would need raises well above its latest 2%.
This isn’t to say Kinder Morgan’s dividend isn’t safe. It’s the better-covered dividend of the two, it carries less debt, and management keeps committing to grow the payout. It’s just that the question here is income, and TC Energy covers the bigger check comfortably enough to keep paying it.
Of course, Kinder Morgan’s backlog could change the math. CEO Kimberly Dang said “we expect that we will be adding projects to the backlog,” and faster raises from those projects would narrow the gap.
So what is TC Energy stock actually worth?
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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!
