Return on Equity (ROE)
since 2010
Calculation
Kinder Morgan Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss) attributable to Kinder Morgan, Inc.1 | ÷ | Total Kinder Morgan, Inc.’s stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2019 | 6.49% | = | 100 | × | 2,190) | ÷ | 33,742) |
| Dec 31, 2018 | 4.78% | = | 100 | × | 1,609) | ÷ | 33,678) |
| Dec 31, 2017 | 0.54% | = | 100 | × | 183) | ÷ | 33,636) |
| Dec 31, 2016 | 2.06% | = | 100 | × | 708) | ÷ | 34,431) |
| Dec 31, 2015 | 0.72% | = | 100 | × | 253) | ÷ | 35,119) |
| Dec 31, 2014 | 3.01% | = | 100 | × | 1,026) | ÷ | 34,076) |
| Dec 31, 2013 | 9.11% | = | 100 | × | 1,193) | ÷ | 13,093) |
| Dec 31, 2012 | 2.27% | = | 100 | × | 315) | ÷ | 13,865) |
| Dec 31, 2011 | 17.90% | = | 100 | × | 594) | ÷ | 3,321) |
| Dec 31, 2010 | -1.20% | = | 100 | × | (41) | ÷ | 3,439) |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 US$ in millions
The analysis of return on equity (ROE) from 2010 to 2019 reveals a period characterized by significant structural capital changes and fluctuating profitability levels.
- Return on Equity Volatility
- ROE exhibited extreme variance throughout the decade, starting with a negative value of -1.20% in 2010 and reaching a peak of 17.90% in 2011. Following this peak, a sustained period of compression occurred, with ROE frequently dropping below 3.0% between 2012 and 2017, including a low of 0.54% in 2017. A gradual recovery is observed in the final two years, with the ratio climbing to 4.78% in 2018 and 6.49% in 2019.
- Equity Base Expansion
- The fluctuations in ROE are heavily influenced by a massive expansion of the stockholders' equity base. Total equity rose from 3.44 billion in 2010 to 33.74 billion by 2019. Significant capital increases occurred in 2012 and 2014, which substantially increased the denominator of the ROE calculation. This expansion explains why the ROE remained suppressed even during years of positive net income, as the earnings were distributed across a much larger equity foundation.
- Net Income Correlation
- Net income demonstrated a volatile upward trajectory, transitioning from a loss of 41 million in 2010 to a peak of 2.19 billion in 2019. Despite net income reaching its highest levels in 2018 and 2019, the ROE for those years remained significantly lower than the 2011 peak of 17.90%. This indicates that while absolute profitability improved substantially over the decade, the efficiency of equity utilization decreased relative to the early period due to the increased capital scale.
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Comparison to Competitors
Kinder Morgan Inc., ROE, long-term trends, comparison to competitors
| Kinder Morgan Inc. | Chevron Corp. | ConocoPhillips | ExxonMobil Holdings Corp. | |
|---|---|---|---|---|
| Dec 31, 2019 | 6.49% | 2.03% | 20.55% | 7.48% |
| Dec 31, 2018 | 4.78% | 9.59% | 19.59% | 10.87% |
| Dec 31, 2017 | 0.54% | 6.21% | -2.79% | 10.50% |
| Dec 31, 2016 | 2.06% | -0.34% | -10.34% | 4.69% |
| Dec 31, 2015 | 0.72% | 3.00% | -11.14% | 9.45% |
| Dec 31, 2014 | 3.01% | 12.41% | 13.23% | 18.65% |
| Dec 31, 2013 | 9.11% | 14.37% | 17.58% | 18.72% |
| Dec 31, 2012 | 2.27% | 19.18% | 17.56% | 27.06% |
| Dec 31, 2011 | 17.90% | 22.16% | 19.07% | 26.59% |
| Dec 31, 2010 | -1.20% | 18.10% | 16.57% | 20.74% |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
Comparison to Sector (Oil, Gas & Consumable Fuels)
Kinder Morgan Inc., ROE, long-term trends, comparison to sector (oil, gas & consumable fuels)
| Kinder Morgan Inc. | Oil, Gas & Consumable Fuels | |
|---|---|---|
| Dec 31, 2019 | 6.49% | 6.59% |
| Dec 31, 2018 | 4.78% | 11.08% |
| Dec 31, 2017 | 0.54% | 7.66% |
| Dec 31, 2016 | 2.06% | 1.07% |
| Dec 31, 2015 | 0.72% | 4.49% |
| Dec 31, 2014 | 3.01% | 15.37% |
| Dec 31, 2013 | 9.11% | 16.83% |
| Dec 31, 2012 | 2.27% | 22.69% |
| Dec 31, 2011 | 17.90% | 23.57% |
| Dec 31, 2010 | -1.20% | 18.98% |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
Comparison to Industry (Energy)
Kinder Morgan Inc., ROE, long-term trends, comparison to industry (energy)
| Kinder Morgan Inc. | Energy | |
|---|---|---|
| Dec 31, 2019 | 6.49% | 3.63% |
| Dec 31, 2018 | 4.78% | 10.63% |
| Dec 31, 2017 | 0.54% | 6.58% |
| Dec 31, 2016 | 2.06% | 0.52% |
| Dec 31, 2015 | 0.72% | 4.61% |
| Dec 31, 2014 | 3.01% | 15.28% |
| Dec 31, 2013 | 9.11% | 16.85% |
| Dec 31, 2012 | 2.27% | 22.06% |
| Dec 31, 2011 | 17.90% | 22.94% |
| Dec 31, 2010 | -1.20% | 18.51% |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).