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ONEOK: A Top S&P 500 Dividend Stock


Jun. 28 2018, Updated 12:39 p.m. ET

ONEOK’s yield

With a dividend yield of ~4.6%, ONEOK (OKE) is one of the 39 companies in the S&P 500 Index with a yield greater than 4%. Based on the estimated 2018 dividend yield, the remaining 461 companies in the index yield less than 4%. Nearly 88 companies have yields close to 0%. Currently, nearly 16 S&P 500 companies yield greater than 5%.

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ONEOK’s attractive yield

ONEOK’s yield is higher than the median S&P 500 yield of ~2.2%. ONEOK’s estimated 2018–2020 EBITDA growth rate of 11.6% is also higher than the expected median EBITDA growth rate of 7% for S&P 500 companies during the same period.

The above table compares ONEOK’s yield, estimated EBITDA, EPS, and dividend growth with the median S&P 500 numbers.

ONEOK’s expected EPS growth of ~12.7% during 2018–2020 is higher than the expected median S&P 500 EPS growth rate of 9.9% during this period. ONEOK expects dividend growth of ~10.6% during 2018–2020, which is higher than the expected median S&P 500 dividend growth of 6.2% during the same period.

ONEOK’s expected dividend growth during 2018–2020 is one of the highest among the S&P 500 investment-grade companies with a yield greater than 4%.

Midstream peers

ONEOK’s yield is lower compared to ~6.8% for Energy Transfer Equity (ETE) and MPLX (MPLX). Enterprise Products Partners (EPD), Magellan Midstream Partners (MMP), and Williams Companies (WMB) are trading at yields higher than 5%. Kinder Morgan (KMI) is trading at a yield close to ONEOK’s yield.

In addition to the yield, ONEOK has generated attractive price returns for its investors in 2018. Next, we’ll discuss ONEOK’s current valuation.


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