Both midstream giants raised their 2026 outlooks and delivered nearly identical stock returns this year, yet one of them could quietly trigger a tax bill inside your IRA that eats into those retirement savings.
Energy Transfer (NYSE:ET | ET Price Prediction) and Kinder Morgan (NYSE:KMI) have both raised their 2026 outlooks as power plants, LNG terminals, and data centers burn more natural gas. Kinder Morgan reported third-quarter results on October 21. Energy Transfer’s latest report covers the second quarter. If you’re retired, two things matter most: how safe each payout is and which tax form lands in your mailbox.
Volatility Lifted Energy Transfer While Contracts Carried Kinder Morgan
Energy Transfer’s second-quarter adjusted EBITDA came in at $5.07B, up 31%, and management raised full-year guidance to $18.8B-$19.1B. NGL exports set a record, rising 25%. Part of the jump came from market swings, including $113 million from wider basis differentials. Those profits could fade if markets calm down.
Kinder Morgan posted adjusted EPS of $0.35 in the third quarter on adjusted EBITDA of $2.18 billion. Management was upfront that one-time items, such as Winter Storm Fern, added about $225 million to 2026 results. The project backlog rose from $9.6 billion to $14.4 billion. Two new pipelines drove the increase. Permian Link has an A-rated hyperscaler as its anchor customer, and Southeast Connector serves investment-grade utilities. Both rest on contracts that run at least 20 years.
Retirement Lens Energy Transfer Kinder Morgan Annual payout $1.36 $1.19 Forward yield 6.8% 3.6% Leverage 4 to 4.5x target 3.5x Tax form Schedule K-1 Form 1099
Higher Checks or a Stronger Balance Sheet
Energy Transfer pays the higher check. Its distribution has now risen for 19 consecutive quarters, and the partnership targets 3% to 5% growth each year. It also owes more. Long-term debt was at $68.3B, and growth spending runs $5.6B-$5.9B a year.
Kinder Morgan raised its dividend just 2%. In return, it has a cleaner balance sheet: Moody’s upgraded it to Baa1, and it generates about $3 billion in annual cash flow to fund expansion. The stocks have moved almost in step this year, up 28.66% and 27.13%, so the market isn’t clearly favoring either one.
What a K-1 Means Inside an IRA
Energy Transfer is a partnership. Each year you receive a Schedule K-1 showing your share of its income. Inside an IRA, that share can count as unrelated business income whether or not distributed (26 U.S.C. § 512(c)(1)). If that income reaches $1,000 or more, the IRA must file Form 990-T, and you pay any tax owed from your retirement savings. Kinder Morgan is a regular corporation, so you get a standard 1099.
What I’m Watching Next
When Energy Transfer reports third-quarter results, I want to see whether the Hugh Brinson pipeline reached its full 1.5 Bcf per day on schedule. For Kinder Morgan, watch Trident. Only 30% of that project’s signed EBITDA arrives in 2027, so growth will be uneven next year.
Why Kinder Morgan Fits Retirement Accounts Better
For retirement-focused investors, Kinder Morgan’s profile stands out. The yield is smaller, but it matches lower leverage, a credit upgrade, decades of demand-side contracts, and a simple 1099. Energy Transfer’s higher payout may appeal to income seekers in taxable accounts. Inside an IRA, the K-1 paperwork and extra leverage add friction worth exploring.
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Source: 247wallst.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
