ONEOK’s Dividend Hike and New Projects Might Change The Case For Investing In OKE

• In recent updates, ONEOK highlighted that its extensive, long-term, fixed-fee pipeline contracts are generating stable cash flows that support a predictable dividend, which the company recently increased by 4% in early 2025 while targeting 3%–4% annual payout growth.
• At the same time, ONEOK is committing capital to new LPG export and natural gas pipeline projects expected to enter service by 2028, reinforcing the link between its infrastructure expansion and its capacity to support future dividend increases.
• Now we’ll examine how this emphasis on dividend growth supported by long-term contracts may influence ONEOK’s existing investment narrative.

We've found 11 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

ONEOK Investment Narrative Recap

To own ONEOK, you need to believe in the durability of its fee-based midstream model and its ability to translate that into ongoing cash returns. The latest update on long-term fixed-fee contracts and targeted 3%–4% annual dividend growth supports the existing income-focused thesis, but it does not materially change the near term tension between funding new projects and managing leverage, which remains a key risk if market volatility persists.

The recent 4% dividend increase to US$1.03 per share quarterly and reaffirmed growth target is the clearest link between ONEOK’s expansion plans and shareholder returns. As the company invests in LPG export and natural gas pipeline projects slated for service by 2028, investors may watch how these commitments interact with its already higher leverage from past acquisitions and the potential impact on flexibility if commodity conditions stay choppy.

However, investors should also be aware that if debt servicing rises faster than cash flow growth, the room to keep growing the dividend could...

Read the full narrative on ONEOK (it's free!)

ONEOK's narrative projects $34.0 billion revenue and $4.2 billion earnings by 2028. This requires 6.7% yearly revenue growth and about a $1.1 billion earnings increase from $3.1 billion today.

Uncover how ONEOK's forecasts yield a $88.63 fair value, a 25% upside to its current price.

Exploring Other Perspectives

Ten fair value estimates from the Simply Wall St Community span roughly US$65 to US$162 per share, showing how far apart individual views can be. When you set those against ONEOK’s reliance on long term fossil fuel infrastructure at a time of ongoing decarbonization efforts, it underlines why exploring several different viewpoints on the company’s future cash flows and risks can be useful.

Explore 10 other fair value estimates on ONEOK - why the stock might be worth over 2x more than the current price!

Build Your Own ONEOK Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ONEOK research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
• Our free ONEOK research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ONEOK's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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