Yahoo Finance ONEOK, Inc. (NYSE:OKE) Is About To Go Ex-Dividend, And It Pays A 4.9% Yield
It looks like ONEOK, Inc. (NYSE:OKE) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase ONEOK's shares before the 30th of April to receive the dividend, which will be paid on the 15th of May.
The company's upcoming dividend is US$0.99 a share, following on from the last 12 months, when the company distributed a total of US$3.96 per share to shareholders. Last year's total dividend payments show that ONEOK has a trailing yield of 4.9% on the current share price of US$80.95. If you buy this business for its dividend, you should have an idea of whether ONEOK's dividend is reliable and sustainable. As a result, readers should always check whether ONEOK has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for ONEOK
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. ONEOK paid out more than half (70%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (65%) of its free cash flow in the past year, which is within an average range for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see ONEOK's earnings per share have risen 10% per annum over the last five years. ONEOK has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some further dividend increases in the future.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. ONEOK has delivered 10% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
The Bottom Line
Has ONEOK got what it takes to maintain its dividend payments? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. That's why we're glad to see ONEOK's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 70% and 65% respectively. In summary, it's hard to get excited about ONEOK from a dividend perspective.
So while ONEOK looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 3 warning signs for ONEOK you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.
