In the months after everyone jumped ship on the energy sector due to falling oil prices, independent research firm Argus thinks it might be time to get back on board — at least for one company. Argus analysts Michael Burke and Nicolay Nielsen see Kinder Morgan Inc. (NYSE: KMI) as a stable bet going forward.

Kinder Morgan operates a stable group of mainly fee-based midstream assets that provide both geographic diversity and the potential for further expansion. Most Kinder Morgan businesses benefit from increasing pipeline volumes in the manner of a “toll collector” and have minimal exposure to changes in commodity prices.

Although Kinder Morgan attempts to limit direct commodity exposure, it maintains some exposure through its CO2 business. It has hedged 79% of projected 2015 production in this business at approximately $80 per barrel.

As a result, the independent research firm initiated coverage of Kinder Morgan with a Buy rating and a $50 price target, implying an upside of nearly 20% from Friday’s close of $42.12. Argus set earnings per share (EPS) estimates at $0.96 for 2015 and $1.17 for 2016.

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At the end of the fourth quarter, Kinder Morgan had a project backlog of $17.6 billion, consisting of 90% fee-based pipelines and terminals under long-term contracts, with Canada and natural gas accounting for most of the backlog.

Kinder Morgan plans to spend $4.4 billion on growth projects in 2015, primarily on natural gas pipelines. In 2015, the company projects $8.2 billion in earnings. Management expects roughly 85% of this $8.2 billion to be fee-based and 94% to be either fee-based or hedged, minimizing the company’s exposure to falling commodity prices.

The company raised its quarterly dividend by 10% in February to $0.45 per share, for a yield of about 4.4%. Ultimately Kinder Morgan plans to increase its dividend by 10% annually over the next five years, from a projected 2015 payout of $2.00 per share. This dividend growth will be supported by the company’s $17.6 billion five-year project backlog and by continued growth in North American hydrocarbon production.

The company’s debt-to-equity ratio was 54% at the end of 2014, close to the industry average.

Shares of Kinder Morgan were relatively flat at $42.00 in Monday’s early morning trading indications, on a 52-week trading range of $31.18 to $43.18. The stock has a consensus analyst price target of $47.27.

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In terms of the Energy sector, it has been the victim of the strengthening U.S. dollar, growing oil supply and slack demand. The recent rebound in energy stocks fell short of past highs but may have pushed these stocks past fair value, given the worsening challenges in the sector. With a harsh winter winding down but oil supplies continuing to build, the potential for a renewed wave of energy price decline makes a strong case for an Underweight rating in this sector. Argus described its market views on West Texas Intermediate (WTI) and Brent:

Our average WTI price forecasts are $55 per barrel for 2015 and $65 per barrel for 2016. For Brent, our average 2015 forecast is $59 per barrel and our 2016 forecast is $70. We note that geopolitical instability, particularly in the Middle East, may result in large deviations from our current price forecasts.

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