ONEOK Entices Investors With 3.3% Quarterly Dividend Hike
Zacks Investment Research | Jan 17, 2018 09:20PM ET
ONEOK, Inc. (NYSE:OKE) announced a 3.3% hike in its quarterly dividend to 77 cents per share from the prior quarterly dividend of 74.5 cents. The company’s new annualized equivalent dividend rate is $3.08 per share up from the prior annualized level of $2.98 per share.
The new quarterly dividend will be payable on Feb 14 to shareholders of record at the close of business on Jan 29. Based on yesterday's closing price of $59.42, ONEOK’s dividend yield comes at 5.18%, better than the industry average of 2.84%.
ONEOK’s Long-term Goals
With long-term value creation in mind, the company has taken consistent steps to enhance balance sheet strength. ONEOK’s proactive approach to lower debt levels will strengthen financial health and boost performance. Notably as of Sep 30, 2017, the company further lowered debt level by nearly $1 billion.
ONEOK has increased dividend by 25% since the close of the ONEOK and ONEOK Partners merger transaction in June 2017. It had announced a dividend increase to 74.5 cents per share in the first quarter following the close of the transaction, a 21% increase compared with the fourth quarter of 2016. As previously announced, the company also anticipates growing annual dividend by approximately 9-11% through 2021.
Dividend Hike Usual with Utilities
The demand for utility services is generally immune to fluctuations of the economic cycle especially as they provide basic services like gas, electricity, and water. Consequently, the stocks in this space are regarded as safe-havens and enjoy a steady flow of revenues and cash flows.
As a result of this, these stocks tend to generate consistent profits and reward shareholders with high dividends and ONEOK is no exception. In this line, another utility, ONE Gas, Inc. (NYSE:OGS) has also raised quarterly dividend by 4 cents per share to 46 cents per share, effective for the first quarter of 2018, resulting in an annualized dividend of $1.84 per share. Notably, this utility has also provided investors with long-term guidance. (Read more: Original post
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