This Top Dividend Stock with a 4% Yield Just Raised Its Payout Again
Discover what drives ONEOK’s success and why this dividend giant could be a great addition to your portfolio.
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Intro
💡 Invest in companies you believe in - W. Buffett
ONEOK (NYSE: OKE), a leader in pipeline infrastructure, continues to deliver dividend stability and growth. With a track record spanning more than a quarter-century, the company has increased its dividend by an impressive 1,230% since 2000.
In its latest move, ONEOK raised its annualized dividend by 4%, boosting its yield to approximately 4%. This highlights the company’s strong cash flow and ongoing commitment to shareholder returns.
Here’s a closer look at what’s fueling ONEOK’s dividend growth and its potential to keep rewarding investors.
History of the Company
ONEOK, Inc. was founded in 1906 as the Oklahoma Natural Gas Company, originally serving as a small gas distributor in the Oklahoma region. Over the decades, the company expanded its operations through acquisitions and diversification, transforming into a major midstream energy provider.
In 1980, the company rebranded to ONEOK, signaling its broader focus beyond natural gas distribution. Today, with more than a century of expertise, ONEOK stands as a leading player in the natural gas and natural gas liquids sector, recognized for its commitment to innovation, sustainability, and delivering energy solutions across North America.
A Leading Energy Infrastructure Giant
Oneok owns over 50,000 miles of pipelines that transport natural gas liquids (NGLs), crude oil, and refined products from production sites to market hubs. Its portfolio also includes gas processing plants, NGL fractionators, and storage terminals.
These assets generate steady cash flows, supported by long-term contracts and regulated pricing structures. Over the years, Oneok has invested billions in expanding its network through acquisitions and organic projects.
In 2023, it completed a transformational $18.8 billion acquisition of Magellan Midstream Partners. The company followed this with a $5.9 billion deal to acquire Medallion Midstream and a 43% stake in EnLink Midstream. Most recently, it announced plans to acquire the remaining publicly held shares of EnLink, solidifying its market position.
Key Institutional Investors in ONEOK Inc. (NYSE: OKE)
Institutional investors hold a substantial portion of ONEOK, Inc. (OKE)'s outstanding shares, reflecting strong confidence in the company's performance and strategy. The top three institutional shareholders include:
The Vanguard Group, Inc., owning 48.5 million shares (8.3% of total shares).
BlackRock, Inc., with 45 million shares (7.7%).
State Street Corporation, holding 32 million shares (5.5%).
Strategic Investments Drive Growth
ONEOK Inc. (NYSE: OKE)
Financial Score: 86 / 99 ⭐️⭐️⭐️⭐️
Industry: Oil & Gas Midstream
Annualized 3-Year Dividend Growth: 1.92%
👉 Learn more about Financial Score
Oneok's investment strategy has proven fruitful, enabling it to deliver 10 consecutive years of adjusted EBITDA growth from 2013 to 2023. The company has expanded EBITDA at an impressive 15% annual rate during this time, with 2024 seeing a surge of 27%, thanks to acquisitions.
The momentum continues into 2025. Oneok expects to generate over $8 billion in adjusted EBITDA this year, reflecting a 20%+ increase from 2024. This growth is driven by synergies from its recent deals, including over $250 million from the EnLink and Medallion acquisitions and $415 million from the Magellan deal.
Moreover, the company is advancing several organic growth projects, such as expanding its Elk Creek NGL pipeline, boosting refined products capacity in Denver, and completing the Medford Fractionator. These initiatives are expected to come online by 2027, unlocking new revenue streams.
ONEOK Inc - Quick MaxDividends Team Overview
🟢 According to the latest reports, the company demonstrates positive financial results
🟢 Business sales are growing, which is a positive factor creating a positive trend
🟢 Operating profit is growing, the company in this sense has a good margin of safety and dynamics
🟢 Earnings per share are growing, the dynamics have been positive for several years. This means the company knows how to manage business profitability and maintain it for many years
🟢 The company is successfully managed and consistently profitable, maintaining its position for a long time.Financial Statement
If you want to stay on top of your portfolio's health, don't forget to check in on the financials of the companies you've invested in. The better shape they’re in, the better your results will be. Keep an eye on their quarterly and annual reports to see how they're performing.
Here is a quick dive into ONEOK Inc financials over last years
The strongest and most stable companies tend to have a Financial Score of 80+, with the very best ones hitting 90+. If you see that score start to dip below 80, that’s your cue to consider jumping ship before things get worse.
👉 Learn More about Financial Score
Our Paid Members get access to a curated watchlist of 19,000 companies worldwide, all scored by our team on a regular basis. Companies like ONEOK Inc are on that list, too.
Future Growth Prospects for ONEOK, Inc. (OKE)
ONEOK, Inc. has strong growth prospects driven by several key factors. The company is actively expanding its natural gas liquids (NGL) operations and making significant strategic acquisitions, such as the $6.9 billion purchase of an interest in EnLink in October 2024 and the $5.052 billion acquisition of Medallion. These moves are set to enhance infrastructure and expand market reach.
Planned capital expenditures for 2024 range from $1.75 billion to $1.95 billion, demonstrating the company’s commitment to growth. Revenue for the first nine months of 2024 grew by 18.1% compared to the same period in 2023, reaching $14.698 billion. Net income also increased to $2.112 billion, reflecting strong operational performance.
ONEOK is also leveraging strategic partnerships, such as joint ventures with EnLink, to unlock additional revenue streams. The company’s competitive advantages include a robust infrastructure network, investment-grade credit ratings (Moody’s Baa2, S&P BBB, Fitch BBB), and strong cash flow generation, with $3.277 billion in operating cash flow reported for the first nine months of 2024.
Recent ONEOK Financial Performance (2024)
Compared to Q3 2023, Q3 2024 revenues grew by approximately 19.9%, while net income rose by 52.6%. Operating income also increased by over 52.6%, reflecting improved efficiency and profitability.
Despite the slight decrease in year-to-date EPS due to higher dividend payouts, these metrics underscore ONEOK’s solid financial foundation.
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Competitors
1. Atmos Energy Corporation (NYSE: ATO)
Financial Score: 87 / 99
Industry: Utilities - Regulated Gas
Dividend increase - 34 Years
Atmos Energy Corporation, founded in 1906 and headquartered in Dallas, Texas, is a leading regulated natural gas utility company in the United States. It operates through two primary segments: Distribution and Pipeline & Storage. The
Distribution segment delivers natural gas to approximately 3.3 million customers across eight states, supported by an extensive network of over 73,000 miles of underground distribution and transmission mains.
The Pipeline & Storage segment manages five underground storage facilities and 5,645 miles of transmission pipelines, offering essential transport and storage services to third parties.
Known for its stable financial performance, strong market position, and commitment to sustainability, Atmos Energy continues to play a pivotal role in delivering reliable energy solutions while maintaining a focus on environmental responsibility.
2. National Fuel Gas Co. (NYSE: NFG)
Financial Score: 87 / 99
Industry: Oil & Gas Integrated
founded in 1902 and headquartered in Williamsville, New York, is a diversified energy company with a significant presence across various segments of the natural gas industry. The company operates through four primary segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility.
It explores for, develops, and produces natural gas and oil, while also providing natural gas transportation services through a network of pipelines in Pennsylvania and New York. National Fuel Gas manages over 3,000 miles of gas pipelines and operates significant underground storage facilities.
The Utility segment serves approximately 750,000 customers in the Buffalo, Niagara Falls, Jamestown, Erie, and Sharon regions.
In fiscal year 2023, the company reported total revenues of $2.17 billion, with a net income of $374 million. National Fuel Gas has demonstrated consistent growth with a 5-year average revenue growth rate of 3.8%, while maintaining a stable dividend yield of 3.0%.
The company’s dividend history is impressive, with 26 consecutive years of dividend payments, reflecting its financial stability and commitment to shareholder returns.
Final Thoughts: Should You Buy ONEOK?
Investing in ONEOK, Inc. (OKE) presents a compelling opportunity for those seeking exposure to the natural gas and energy infrastructure sector. The company has demonstrated robust financial performance with consistent revenue growth, highlighted by a strong 18.1% increase in revenue in the first nine months of 2024.
Current Market Value
Undervalued \ Overvalued \ Fairly valued
Compare competitor companies` P/E ratios to find out if the stocks you`re looking to trade are overvalued. We take the P/E average among competitors.
If a company`s current P/E is 20% or more lower than its competitor`s average, the company is considered undervalued. If it is higher by 20% or more, it is overvalued.
P/E ratio is calculated by dividing the market value per share by the earnings per share (EPS).
🟠 Overvalued
Although this company is not in our current portfolio, we are keeping a close eye on it by putting it on our watch list.
Analysts Consensus
Based on recent analyst recommendations, ONEOK Inc. has received a mix of ratings, with a notable portion of analysts issuing "Hold" ratings. The distribution of recommendations suggests a cautious sentiment, with a limited number of "Strong Buy" and "Buy" ratings.
Price target estimates indicate a range from $89.00 (Low) to $147.00 (High), with an average target of $110.55. The current stock price of $99.70 is below the average analyst target but still within the projected range.
Our Perspective: Overvalued
Despite analyst targets suggesting some upside potential, we believe ONEOK Inc. is overvalued at its current price.
The stock's present valuation does not fully account for potential risks, including market volatility, regulatory uncertainties, and sector-specific challenges. Investors should exercise caution and consider whether the stock’s fundamentals justify its current price.
To your wealth, MaxDividends Team
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