Kinder Morgan Inc. (NYSE:KMI)

Return on Assets (ROA)

The ROA exhibits variability over the observed periods. Initial data from early 2015 is unavailable; however, starting from March 2016, ROA values are generally positive with a few exceptions such as December 2016 and September 2018, which are negative at -0.24% and -0.32%, respectively. From 2017 through 2020, the ROA shows an overall upward trajectory, peaking at 3.00% in September 2019 before declining somewhat to 1.81% by March 2020. This pattern suggests periods of improved asset efficiency interspersed with short-term setbacks. The data indicates a relatively strong asset utilization performance towards the end of the period.

Financial Leverage

Financial leverage shows a gradual and consistent decline over the examined periods, from 2.46 in March 2015 to around 2.22 by March 2020. This downward trend indicates a modest reduction in reliance on debt relative to equity, suggesting a progressive strengthening of the company’s capital structure. The ratio remains in a narrow range, showing controlled leverage risk and a stable approach to financing.

Return on Equity (ROE)

ROE follows a pattern similar to ROA, with intermittent negative values in late 2016 and late 2018. The values range from negative 0.76% in September 2018 to a high of 6.84% in September 2019. The overall trend shows an improvement in the profitability generated on shareholder equity, particularly after 2017. Despite the volatility, the increase in ROE suggests enhanced effectiveness in generating returns for equity holders, especially notable in the final years of the data set. The decline in leverage may also accompany the improvements in ROE, highlighting the company’s gradual shift towards more efficient equity utilization.

Net Profit Margin

The net profit margin exhibits a variable trend over the observed periods, beginning with missing data for the early quarters of 2015. From March 2016 onward, the margin fluctuates, showing an initial increase reaching 5.42% by March 2017, followed by some volatility including brief negative margins in December 2015 (-1.47%) and September 2018 (-1.82%). Notably, starting in March 2019, the net profit margin improves significantly, reaching a peak of 16.58% in March 2020 before decreasing slightly to 10.31%. This indicates a general upward trajectory in profitability despite intermittent declines.

Asset Turnover

The asset turnover ratio remains relatively stable throughout the periods, maintaining values around 0.16 to 0.19. There is a modest gradual increase from 0.16 in late 2015 to a peak of 0.19 in late 2019, after which it stabilizes at approximately 0.18 to 0.19. This suggests consistent efficiency in using assets to generate revenue with slight improvement over time.

Financial Leverage

Financial leverage shows a slow downward trend from early 2015 through 2020. The ratio decreases from 2.46 in March 2015 to around 2.2–2.3 during 2019 and early 2020. This decline indicates a gradual reduction in the use of debt relative to equity, implying a possible strategic move toward a more conservative capital structure.

Return on Equity (ROE)

The ROE reflects considerable volatility with periods of low or negative returns, such as -0.57% in December 2015 and -0.76% in September 2018. However, from early 2017 onwards, there is a consistent improvement with ROE rising from around 2.06% in March 2017 to a peak of 6.84% in September 2019. The figure slightly dips in early 2020 but remains at a relatively higher level compared to earlier periods. This suggests improving profitability and efficiency in generating returns for shareholders over time, despite episodic downturns.

Tax Burden

The tax burden ratio shows considerable volatility across the periods analyzed. It starts with positive values around 0.31 and declines to -0.33 in December 2015, indicating a potential tax credit or benefit at that time. Following this, the ratio stabilizes in a generally positive range with some fluctuations, reaching peaks around 0.74 in late 2019 before declining slightly to 0.62 in the first quarter of 2020. This suggests fluctuating tax efficiency or changes in tax liabilities impacting net income.

Interest Burden

The interest burden exhibits a generally positive and gradually improving trend. Starting at 0.28 in March 2016, it increases over time to a high of 0.63 by third quarter 2019, before experiencing a mild decrease to 0.55 in the first quarter of 2020. Overall, this reflects an improving ability to cover interest expenses from operating earnings, with minor recent weakening.

EBIT Margin

EBIT margin displays an upward trajectory through the periods, indicating enhanced operational profitability. Starting around 19.91% in March 2016, it rises steadily with some fluctuations and peaks at 37.22% by the third quarter of 2019. The margin falls slightly to 30.41% in the first quarter of 2020, but remains significantly higher than earlier periods. This trend suggests improved efficiency or pricing power over time.

Asset Turnover

Asset turnover remains relatively stable and low throughout, fluctuating narrowly between 0.16 and 0.19. This stability suggests consistent asset utilization efficiency without major operational changes affecting asset use.

Financial Leverage

Financial leverage gradually decreases over the periods, from 2.46 in early 2015 to around 2.2 in the first quarter of 2020. This indicates a moderate reduction in reliance on debt financing relative to equity, potentially reflecting deleveraging or capital structure adjustments aiming for lower financial risk.

Return on Equity (ROE)

ROE shows significant volatility but a general upward trend over the periods. Early results include low to negative returns, with a negative value in December 2015 and intermittent dips, such as in the third quarter of 2018. Starting from 2017, ROE improves notably, reaching a peak of 6.84% in the third quarter of 2019. However, it declines to 4.01% in early 2020. These changes suggest fluctuating profitability impacted by operating performance, tax, and interest expenses, with overall improvement in shareholder returns over time.

The analysis of the quarterly financial metrics reveals several noteworthy trends over the observed periods.

Net Profit Margin (%)

The net profit margin data begins with limited observations early in 2015 and shows fluctuations throughout the period from 2015 to the end of the first quarter of 2020. Initial values range near zero, exhibiting some volatility including a negative margin of -1.47% in the fourth quarter of 2015 and another dip to -1.82% in the third quarter of 2018. Despite these setbacks, the net profit margin generally trends upward across the years. Significant improvements are noted beginning in 2017, where margin figures reach double digits, peaking at 16.5% in the third quarter of 2019. The growth indicates enhanced profitability, with some variation, culminating in a margin of 10.31% in the first quarter of 2020. This trend suggests effective management of expenses relative to revenues and possibly improved operational efficiency or market conditions favoring the company in recent years.

Asset Turnover (ratio)

The asset turnover ratio exhibits remarkable stability over the assessed timeframe. Starting at 0.17 in early 2015 and maintaining around 0.16 to 0.18 throughout the entire data set, this measure indicates a consistent ability to generate sales revenue from assets. Slight upward adjustments near the end of the period, particularly between late 2017 and 2019, where the ratio reaches up to 0.19, may reflect marginal improvements in asset utilization. Nonetheless, the overall pattern is flat, indicating that the asset base and sales relationship remained steady without considerable efficiency gains or losses.

Return on Assets (ROA) (%)

The return on assets starts with weak or slightly negative figures through 2015 and part of 2016, including a downturn to -0.24% in the last quarter of 2015. Following this period, ROA progressively improves, with positive gains starting in early 2016. The most pronounced increases occur between 2017 and 2019, where ROA climbs from modest values around 1% to a high of 3% in the third quarter of 2019. This upward trend signifies better overall profitability relative to the asset base, reflecting both improved profit margins and steady asset turnover. A slight decline toward 1.81% at the start of 2020 suggests some softening but remains well above earlier lows. This pattern aligns with enhanced operational performance and possibly better capital deployment strategies over time.

In summary, the financial ratios suggest a company that has experienced significant improvement in profitability from 2017 onward, with stable asset utilization and corresponding gains in return on assets. Periodic dips in net profit margin and ROA reflect some operational challenges, but the overarching trajectory points to strengthening financial health and efficiency during the examined quarters.

Tax Burden

The tax burden ratio exhibits considerable variability over the analyzed periods, ranging from negative values to highs above 0.7. Starting with a low of 0.09 in March 2018, it fluctuates substantially, including negative instances in December 2015 and September 2018, suggesting periods of tax credits or losses. From early 2019 onwards, the ratio stabilizes around 0.7 with a slight decline towards 0.62 in March 2020, indicating a relatively consistent proportion of income retained after tax in recent periods.

Interest Burden

This ratio shows a gradual increase over the timeline, reflecting an improving ability to cover interest expenses from operating earnings. The interest burden starts near 0.24 in late 2015 and trends upwards to around 0.6 by 2019, though it slightly dips to 0.55 by the first quarter of 2020. This pattern may imply an improvement in interest coverage but with some recent volatility.

EBIT Margin

EBIT margin percentages demonstrate a generally upward trend with fluctuations. The margin rises from approximately 19.9% in early 2015 to a peak above 37% at the end of 2019, indicating enhanced operational profitability. However, a decline is observed in the first quarter of 2020 to about 30.4%, which may indicate emerging challenges or seasonal effects impacting earnings before interest and taxes.

Asset Turnover

Asset turnover remains relatively stable, fluctuating narrowly between 0.16 and 0.19 throughout all periods. This stability suggests a consistent efficiency in generating revenue from assets over time, without significant operational shifts affecting asset utilization.

Return on Assets (ROA)

The ROA values reveal significant volatility, with period-specific negative results interspersed with strong positive returns. After early negative or near-zero figures in 2015 and 2018, the ROA improves notably from 2017 onward, reaching a high of 3.0% in September 2019. However, a decline to 1.81% occurs by March 2020. The overall trend points to improved asset profitability with intermittent setbacks likely related to operational or external economic factors.

Tax Burden

The tax burden ratio exhibits considerable variability throughout the observed periods, with several fluctuations between positive and negative values. Notably, it starts with relatively low values in early 2016 (0.31 in Q1 2016), followed by a decline and negative value by Q4 2016 (-0.33). From that point on, the tax burden mostly resumes positive values peaking near 0.74 in the latter part of 2019. Towards the end of the timeline in Q1 2020, the tax burden decreases moderately to 0.62.

Interest Burden

The interest burden ratio remains more stable but shows a gradual overall improvement over the timeframe. Early values in 2016 range between 0.24 and 0.28, followed by a noticeable upward trend starting in late 2016 with ratios reaching around 0.54 to 0.63 between 2017 and 2019. There is a slight decline to 0.55 in Q1 2020, yet the general trend suggests improving ability to cover interest obligations.

EBIT Margin

The EBIT margin shows a generally upward trajectory with some fluctuation. Beginning at approximately 19.91% in Q1 2016, it experiences growth, peaking at 37.22% in Q4 2019. This margin reflects increased operational efficiency or improved cost control over time. However, there is a decline at the end of the period to 30.41% in Q1 2020, indicating some recent pressures on earnings before interest and tax.

Net Profit Margin

The net profit margin illustrates a more volatile pattern, initially low and even negative at times within 2016 and 2018. Despite these fluctuations, there is a clear upward progression starting from 2017, with margins climbing to a high of 16.58% in Q4 2019. This improvement suggests enhanced profitability and effective management of expenses and taxes after 2016. By Q1 2020, the margin decreases to 10.31%, signaling some decline but remaining positive.