ONEOK Inc. (OKE) Valuation Update - Aug 16

[dan_s]

OKE gets an A+ for safety and it has the most exposure to the rapidly expanding natural gas and NGL markets among the midstream companies in our High Yield Income Portfolio. It has one of the lowest dividend yields at ~5.9% in the portfolio, but the Company should be increasing dividends soon.
Key point is that they did not reduce the dividend during the pandemic, thanks to their rock-solid balance sheet.

I updated my model for OKE yesterday and what really jumps out is their incredible revenue growth.
Total Revenues:
> 2020 Actual = $8,542 million
> 2021 Actual = $10,540 million
> 2022 Estimate = $24,641 million with actual revenues of $11,441 million in 1H 2022
> 2023 My Guess = $26,500 million

Free cash flow from operations s/b close to $2 billion this year. Prior to the pandemic ONEOK's stated goal was to increase dividends by 8% annually. They now have ample DCF coverage to make that happen in 2H 2022 and much more in 2023.