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The board of directors of ONEOK Partners L.P. (OKS - Analyst Report) has increased the quarterly cash distribution rate by 0.7% sequentially and 12.6% year over year to 71.5 cents per unit.  The new distribution rate will be effective from first-quarter 2013 and is scheduled to be paid on May 15, 2013 to the unitholders of record as of Apr 30, 2013.

Previously, ONEOK Partners’ had increased its cash distribution in Jan 2013. Quarterly distribution payout climbed 3.6% to 71 cents per unit. The partnership values its owners and has been trying to boost their income by hiking the cash distribution almost every year since 1998. Since Apr 2006, the partnership’s cash distribution has increased 79%.

It is evident from ONEOK Partners’ cash distribution history that the partnership is always on the lookout for maximizing its unitholder’s wealth. In Feb 2013, the partnership expressed its intention to raise its total distribution by 8–12%, on average, between 2012 and 2015 and maintain a minimum annual coverage ratio of 1.0–1.05 times. In 2013, ONEOK Partners intends to increase its cash distribution by 0.5 cents per unit quarterly, subject to the required approvals.

ONEOK Partners’ cash flow from operating activities was $0.95 billion in 2012 and cash balance was $0.54 billion as of Dec 31, 2012. A strong financial position allows the partnership to meet its anticipated cash requirements for the future growth projects.

In order to continue with its ventures, ONEOK Partners recently completed three important projects – Bakken natural gas liquids (NGL) pipeline, Stateline II plant and an ethane header pipeline. All the three projects are part of the partnership’s $4.7–$5.3 billion growth program through 2015. These initiatives would add to ONEOK Partners’ profitability in the long run, which will subsequently enable it to provide higher returns to the unitholders.

Though ONEOK Partners has a strong financial position and several prospective growth projects, we are primarily concerned about volatile commodity prices and over-dependence on weather patterns. These negatives can challenge its future performance.

ONEOK Partners currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing better include Atlas Pipeline Partners L.P. (APL - Snapshot Report), Delek Logistics Partners LP (DKL - Snapshot Report) and NuStar Energy L.P. (NS - Analyst Report). All the stocks carry a Zacks Rank #2 (Buy).

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