ONEOK Inc. (OKE) Valuation Update - Feb 27

[dan_s]

At the time of this post OKE was trading at $74.88
For 2024 they have increased their quarterly dividends to $0.99/share ($3.96/year) for annual yield of ~5.3%

My current valuation is $83.00/share. < Based on my forecast, OKE's DCF coverage will be more than 150% of the current dividend. I expect several more dividend increases over the next two years.

TipRanks' current price target is $78.18 < Five analysts have updated their price targets this morning to $73, $77, $77, $83, $86.

ONEOK closed the merger with Magellan Midstream Partners (MMP) on September 25, 2023, so Q4 is the first full quarter of combined results. Q4 results contained $25 million of "Transactions Costs". Plus, going forward I expect there will be some reductions in operating expenses and G&A. I also expect ONEOK to use free cash flow (over $3.2 billion this year) to pay down their debt.

This is a very large midstream company that will generate close to $25 BILLION of revenue this year. It will benefit from increasing demand for NGLs.

If your goal is steadily rising dividend income and security of the principle in your portfolio, OKE should be a core holding.

[aja57]

Midstream stocks all seem to be hitting 52 week highs Any thoughts?