TULSA - ONEOK (NYSE:OKE), a prominent player in the energy infrastructure sector, has announced an enhancement to its shareholder returns with a dual approach. The Tulsa-based company revealed a 3.7% hike in its quarterly dividend, raising it to $0.99 per share. Alongside this increase, ONEOK has also unveiled an ambitious $2 billion stock repurchase program to be executed over the next four years.
The company has set a target for its annual dividend growth rate to hover between 3% and 4%. This strategic move is aimed at rewarding its shareholders while also maintaining a strong balance sheet. The new dividend rate will apply to shareholders on record as of January 30.
In line with its commitment to shareholder value, ONEOK plans to allocate a substantial portion of its operational cash flow, estimated at 75% to 85% after accounting for investments, to fund both dividends and stock buybacks. This approach underscores the company’s focus on sustainable financial practices, as it also seeks to uphold a debt-to-EBITDA ratio around the 3.5 times mark.
This financial strategy reflects ONEOK's confidence in its business model and its ability to generate robust cash flows, which in turn can support its generous dividend policy and share repurchase plan. The company's initiative is a testament to its dedication to delivering value to its investors while also prudently managing its capital structure.
InvestingPro Insights
ONEOK's announcement of increased shareholder returns through dividend hikes and stock repurchase programs signifies a strong commitment to investor value. In light of this, it's worth noting the performance of similar companies in the sector. W. P. Carey Inc. (NYSE:NYSE:WPC), for instance, has demonstrated a robust financial profile that could offer additional insights into the industry's trends.
InvestingPro data shows that W. P. Carey Inc. has a market capitalization of $14.45B and a P/E ratio of 18.05, which adjusts to 23.51 for the last twelve months as of Q3 2023. This reflects a balance between value and earnings potential. The company has also experienced significant revenue growth of 22.15% over the last twelve months as of Q3 2023, indicating a strong market position.
Two InvestingPro Tips highlight the company's strengths: W. P. Carey Inc. has maintained dividend payments for 26 consecutive years, showcasing a reliable return to investors, and analysts predict the company will be profitable this year, reinforcing its financial stability.
For investors looking to delve deeper into the sector and gain more comprehensive insights, InvestingPro offers additional tips. There are a total of 8 InvestingPro Tips available for W. P. Carey Inc., including analysis on sales growth, profit margins, and near-term earnings potential. These tips can be particularly useful for comparing industry peers and assessing investment opportunities.
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