Some dividend-paying companies raise their payout every year,
but the size and timing of the increases aren't known in
), which markets natural gas and related services to distribution
companies, industries and power generators, has sketched a more
On Dec. 2, Oneok announced 2014 guidance that included a plan
for increasing the dividend. The company projected a 44% increase
on a dividend-paid basis -- from an annualized $1.48 paid in 2013
to $2.125 in 2014.
The strategy was linked to the completion of a spinoff.
On Jan. 9, Oneok said it would spin off its natural gas
distribution business into a separate, publicly traded company
calledOne Gas (
) and use the proceeds to lower Oneok's long-term debt. The new
company debuted on the NYSE on Feb. 3.
The spinoff didn't affectOneok Partners (
), a subsidiary of Oneok and a master limited partnership that
operates natural gas liquid pipelines and storage facilities.
Oneok owns 41% of Oneok Partners.
So, income investors have three Oneok-related choices. How do
the choices stack up?
Oneok pays a quarterly dividend of 40 cents a share. The
annualized yield is 2.7%. Oneok grew earnings 8% last year. The
Street expects EPS to fall 5% this year and rise 22% next
Oneok's subsidiary Oneok Partners offers a quarterly dividend
that varies a bit. The February payout was 73 cents a share. The
annualized yield is 5.6%. Earnings declined 23% last year. The
Street expects EPS to improve 18% this year and 7% in 2015.
Recent spinoff One Gas has yet to pay a dividend. According to
the company's 2014 guidance, One Gas will pay a quarterly
dividend of 28 cents a share. On an annualized basis, the yield
would be 3.1%.
Earnings grew 3% last year. The Street estimates 1% and 6% EPS
growth in 2014-15.