This Rock-Solid 5.5%-Yielding Dividend Stock Just Gave its Investors Another Raise

Oneok (NYSE: OKE) offers investors an charismatic dividend output today. At 5.5%, it's respective times supra the S&P 500's dividend yield, which is approaching its grounds debased astatine astir 1.2%.

While higher-yielding dividend stocks tin person higher hazard profiles, that's not the lawsuit with Oneok's payout. It's connected rock-solid ground. That's enabling the pipeline company to springiness its investors different raise.

Oneok precocious declared its latest quarterly dividend payment. The diversified vigor midstream institution volition wage $1.07 per stock ($4.28 annualized) connected Feb. 13 to investors who clasp shares by Feb 2. That's a 4% summation from its anterior level.

That continues the pipeline company's quarter-century way grounds of delivering unchangeable to increasing dividends for its investors. While Oneok hasn't accrued its dividend each twelvemonth during that period, it has astir doubled its dividend outgo implicit the past decade. It has a overmuch amended way grounds than its closest peers successful the pipeline industry, astir of which person reduced their dividend payments astatine immoderate constituent implicit the past 10 years.

Oneok's existent people is to turn its dividend by 3% to 4% each year. That's a precise achievable goal, fixed its fiscal spot and the disposable maturation it has coming down the pipeline.

The pipeline company's diversified midstream operations make precise unchangeable currency travel arsenic semipermanent contracts and government-regulated complaint structures underpin the bulk of its assets. Additionally, the institution has an investment-grade recognition standing backed by a blimpish 3.5 times leverage ratio.

Oneok has grown importantly successful caller years by completing a bid of large-scale acquisitions. It sees the imaginable of capturing respective 100 cardinal dollars successful further outgo savings and commercialized synergies from these deals, including $250 cardinal targeted for 2026.

Meanwhile, the institution has respective integrated enlargement projects nether operation to grow its midstream operations. It presently has projects underway that should participate commercialized work done the mediate of 2028, including joint ventures (JVs) to physique a caller LPG export terminal and a large-scale earthy state pipeline. These projects volition supply Oneok with incremental sources of unchangeable currency travel arsenic they participate commercialized work implicit the adjacent fewer years.