Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0794
    +0.0001 (+0.01%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • dólar/libra

    1.2638
    +0.0016 (+0.13%)
     
  • USD/JPY

    151.2360
    -0.1360 (-0.09%)
     
  • Bitcoin USD

    69,897.82
    -1,428.59 (-2.00%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

ONEOK (OKE) to Reward Shareholders With 2.2% Dividend Hike

ONEOK, Inc.’s OKE board of directors announced 2.2% increase in quarterly dividend to 93.5 cents per share from 91.5 cents. This will result in an annualized dividend payout of $3.74. The revised quarterly dividend will be paid out on Feb 14, 2020 to shareholders of record as of Jan 27, 2020.

The current annualized dividend yield of the company is 4.93%, which is higher than the industry’s 2.81% and the Zacks S&P 500 composite’s 1.76%. Increase in distributable income reflects on the company’s strong performance and cash flow position.

Reasons for the Dividend Hike

The company is benefiting from long-term fee-based commitments in the Natural Gas Gathering as well as Processing and Natural Gas Liquids segments. The company expects nearly 85% of its earnings in 2019 to be fee-based.

Strong cash flow generation capability enables ONEOK to boost shareholders’ value through dividend payout.

Will ONEOK Sustain Dividend Hikes?

The company expects 20% increase in adjusted EBITDA in 2020 from 2019 guidance midpoint. The key catalysts will be Natural Gas Flaring, Rocky Mountain NGLs, Arbuckle II Pipeline & MB-4 and Permian Basin projects. It also expects $4.5 billion in growth projects, which were declared earlier, to be completed through first-quarter 2020.

The company projected long-term EPS growth of 15.8% through Dec 12, 2018 to Dec 12, 2021. Moreover, increase in drilling activities in high productive regions will raise demand for the company’s midstream services. The company expects production volumes in the STACK and SCOOP areas to improve demand for pipeline services.

In addition, the acquisition of the ONEOK Partners is going to be accretive to company’s distributable cash flow from 2017 through 2021. We believe that increase in earnings and steady performance will facilitate the company to further increase annual dividend rate.

Utilities Continue to Reward Shareholders

Apart from ONEOK, other utilities are also revising dividend rates at regular intervals.

In November 2019, MDU Resources’ MDU board of directors announced a hike in the quarterly dividend to 20.75 cents per share, up 2.5% from the previous rate. In September, 2019, OGE Energy OGE announced that its board of directors has approved a 6% increase in the quarterly dividend rate. In the same month, IDACORP IDA announced that its board of directors has approved a 6.3% increase in the quarterly dividend rate to 67 cents.

Zacks Rank & Price Performance

ONEOK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



ONEOK’ shares have rallied 22.6% in the past 12 months compared with the industry’s rise of 16.9%.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.

See 5 Stocks Set to Double>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
IDACORP, Inc. (IDA) : Free Stock Analysis Report
 
OGE Energy Corporation (OGE) : Free Stock Analysis Report
 
MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report
 
ONEOK, Inc. (OKE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Advertisement