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ONEOK (OKE) to Reward Shareholders With 3.7% Dividend Hike
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ONEOK, Inc.’s (OKE - Free Report) board of directors approved a quarterly dividend hike to 99 cents per share, up 3.7% from the previous quarter's level. This will result in an annualized dividend of $3.96 per share, with the new dividend yield being 5.73% better than the S&P 500 Composite’s yield of 1.6%. The company has been distributing dividends since 1972 and targets an annual dividend growth rate between 3% and 4%.
OKE's board of directors also approved a $2 billion share repurchase program and targets to utilize the fund over the next four years. The dividend increase, along with systematic share repurchases, will increase shareholders' value.
Can the Company Sustain Dividend Hike
ONEOK’s capital allocation strategy and commitment to capital-growth opportunities will enable it to generate substantial cash flow from operations in the long run. OKE is poised to benefit from its higher fee-based earnings and midstream assets located in higher productive regions.
The company continues to invest in organic growth projects to expand in the existing operating regions and provide a broad range of services to crude oil as well as natural gas producers and end-use markets. OKE recently completed a 4 billion cubic feet expansion of natural gas storage capabilities in Oklahoma.
ONEOK, with a more than 50,000-mile pipeline network, transports natural gas, natural gas liquids, refined products and crude oil that help meet domestic and international energy demands. All these initiatives are expected to boost the existing operations and create opportunity for further growth from the present levels. This will undoubtedly create additional funds for the company that can be disbursed as dividends to the shareholders.
Oil & Gas Companies Paying Dividends
The oil and gas midstream companies generally earn a steady income through long-term transportation and storage contracts with customers. The stability of performance allows these companies to share profits with shareholders.
Apart from ONEOK, a few other midstream firms have raised dividend and distribution rates in 2023. Cheniere Energy, Inc. (LNG - Free Report) , Delek Logistics Partners, LP (DKL - Free Report) and Energy Transfer LP (ET - Free Report) , among others, have decided to share more profit with shareholders and unit holders.
Cheniere Energy’s board of directors approved a 10% dividend hike, taking the new quarterly cash dividend to 43.50 cents. The new dividend was paid on Nov 17, 2023, to shareholders of record as of the close of business on Nov 9, 2023. The company’s current dividend yield is 1.06%. The Zacks Consensus Estimate for 2024 EPS has moved up 3.9% in the last 60 days to $10.29.
Delek Logistics Partners increased its quarterly distribution rate per unit by 1% to $1.045. The new distribution was paid on Nov 13, 2023, to unitholders of record as of Nov 6, 2023. The Zacks Consensus Estimate for 2024 EPU has moved up 1.7% in the last 90 days to $10.29.
Energy Transfer LP increased its quarterly distribution rate per unit by 0.8% to 31.25. The new distribution was paid on Nov 20, 2023, to unitholders of record as of Oct 30, 2023. The firm reported a positive earnings surprise of 6.9% in the last reported quarter.
Price Performance
ONEOK’s shares have moved up 6.6% in the last six months compared with the industry’s growth of 6.2%.
Image: Shutterstock
ONEOK (OKE) to Reward Shareholders With 3.7% Dividend Hike
ONEOK, Inc.’s (OKE - Free Report) board of directors approved a quarterly dividend hike to 99 cents per share, up 3.7% from the previous quarter's level. This will result in an annualized dividend of $3.96 per share, with the new dividend yield being 5.73% better than the S&P 500 Composite’s yield of 1.6%. The company has been distributing dividends since 1972 and targets an annual dividend growth rate between 3% and 4%.
OKE's board of directors also approved a $2 billion share repurchase program and targets to utilize the fund over the next four years. The dividend increase, along with systematic share repurchases, will increase shareholders' value.
Can the Company Sustain Dividend Hike
ONEOK’s capital allocation strategy and commitment to capital-growth opportunities will enable it to generate substantial cash flow from operations in the long run. OKE is poised to benefit from its higher fee-based earnings and midstream assets located in higher productive regions.
The company continues to invest in organic growth projects to expand in the existing operating regions and provide a broad range of services to crude oil as well as natural gas producers and end-use markets. OKE recently completed a 4 billion cubic feet expansion of natural gas storage capabilities in Oklahoma.
ONEOK, with a more than 50,000-mile pipeline network, transports natural gas, natural gas liquids, refined products and crude oil that help meet domestic and international energy demands. All these initiatives are expected to boost the existing operations and create opportunity for further growth from the present levels. This will undoubtedly create additional funds for the company that can be disbursed as dividends to the shareholders.
Oil & Gas Companies Paying Dividends
The oil and gas midstream companies generally earn a steady income through long-term transportation and storage contracts with customers. The stability of performance allows these companies to share profits with shareholders.
Apart from ONEOK, a few other midstream firms have raised dividend and distribution rates in 2023. Cheniere Energy, Inc. (LNG - Free Report) , Delek Logistics Partners, LP (DKL - Free Report) and Energy Transfer LP (ET - Free Report) , among others, have decided to share more profit with shareholders and unit holders.
Cheniere Energy’s board of directors approved a 10% dividend hike, taking the new quarterly cash dividend to 43.50 cents. The new dividend was paid on Nov 17, 2023, to shareholders of record as of the close of business on Nov 9, 2023. The company’s current dividend yield is 1.06%. The Zacks Consensus Estimate for 2024 EPS has moved up 3.9% in the last 60 days to $10.29.
Delek Logistics Partners increased its quarterly distribution rate per unit by 1% to $1.045. The new distribution was paid on Nov 13, 2023, to unitholders of record as of Nov 6, 2023. The Zacks Consensus Estimate for 2024 EPU has moved up 1.7% in the last 90 days to $10.29.
Energy Transfer LP increased its quarterly distribution rate per unit by 0.8% to 31.25. The new distribution was paid on Nov 20, 2023, to unitholders of record as of Oct 30, 2023. The firm reported a positive earnings surprise of 6.9% in the last reported quarter.
Price Performance
ONEOK’s shares have moved up 6.6% in the last six months compared with the industry’s growth of 6.2%.
Image Source: Zacks Investment Research
Zacks Rank
OKE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.