ONEOK, Inc. (OKE - Analyst Report) continues to share more benefits with its shareholders by increasing the dividend rate. The company has increased the quarterly dividend rate by 5.5% sequentially and 15.2% year over year to 38 cents per share.
During first-quarter 2013 earnings call, the board of directors of ONEOK had announced plans for the current dividend hike. The new dividend will be paid on Aug 15, 2013, to shareholders of record as of Aug 5.
It is evident from ONEOK’s dividend-payment history that the company is always on the lookout for maximizing shareholder wealth. The company intends to raise the total payout by approximately 55% - 65% between 2012 and 2015, subject to the board’s approval. In the long term, ONEOK is targeting to reach a dividend payout ratio in the range of 60% - 70%.
ONEOK has increased its dividend 16 times since 2006. The last quarterly dividend increase was made in Jan 2013. The quarterly dividend had climbed 9% to 36 cents per share from its earlier payment of 33 cents per share.
ONEOK’s cash flow from operating activities during the first three months of 2013 was $471.5 million. A strong financial position allows the company to meet the cash requirements for its dividend payment and for forthcoming ventures.
Further, ONEOK plans to invest $3 billion in 2013 for several projects including the commencement of construction of a 270-mile natural gas gathering system and related infrastructure in Divide County, ND, and a new 200 million cubic feet per day natural gas processing facility called the Canadian Valley plant in the Cana-Woodford Shale, OK.
In addition, the company is in the middle of Garden Creek II and Garden Creek III projects. These initiatives would add to ONEOK’s profitability in the long run, which will in turn enable it to provide higher returns to its shareholders.
Tulsa, OK-based ONEOK Inc. is a diversified energy company, operating as a natural gas distributor, primarily in the U.S.
ONEOK currently has a Zacks Rank #4 (Sell). However, other stocks from the industry that are presently performing well include AGL Resources Inc. , Atmos Energy Corp. (ATO - Snapshot Report) and EQT Corp. (EQT - Analyst Report) . Each of them has a Zacks Rank #2 (Buy).