ONEOK Partners L.P.
) has increased its quarterly cash distribution rate by 3.6%
sequentially and 16.4% year-over-year. The new distribution rate
of 71 cents per unit will be effective from the fourth quarter of
2012 and is scheduled to be paid on Feb 14, 2013 to the
unitholders of record as of Jan 31, 2013.
BUCKEYE PARTNRS (BPL): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
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ONEOK Partners' new annualized cash distribution rate stands at
$2.84 per unit, up 9.7% from the earlier rate of $2.59 per unit.
The new annual cash distribution yield will be 4.8%, which will
be higher than the industry average of 2.4%.
Previously, ONEOK Partners' had increased its cash distribution
in Oct 2012. Quarterly distribution payout climbed 3.8% to 68.5
cents per unit from 66 cents per unit. The partnership values its
owners and has been trying to boost their income by hiking the
cash distribution payment almost every year since 1998. Cash
distribution of the partnership has surged by 78% since Apr 2006.
It is evident from ONEOK Partners' cash distribution history that
the partnership is always on the lookout for maximizing its
unitholder's wealth. In Sep 2012, the partnership expressed its
intention to raise its total distribution by nearly 10% - 15% in
the time span of 2012 to 2015 and maintain a minimum annual
coverage ratio of 1.05 times. In 2013, ONEOK Partners' intends to
increase its cash distribution by 2 cents quarterly, subject to
the required approvals.
ONEOK Partners' third-quarter 2012 cash flow from operating
activities was $620.5 million and cash balance was $963.6 million
as of Sept 30, 2012. We believe strong liquidity position,
including a credit facility of approximately $1.2 billion, allows
the partnership to meet its anticipated cash requirements for
future growth projects.
In order to continue with its growth projects, ONEOK Partners
expects capital expenditure to be between $4.7 billion and $5.3
billion for the period 2013 to 2015. This calls for an additional
investment in the range of $465 - $500 million. The partnership
primarily intends to allocate major chunk of this additional fund
for building a new natural gas processing facility in the Garden
Creek III plant and allied infrastructure in eastern McKenzie
County of the Williston Basin. Moreover, it plans to develop a
new natural gas liquids ("NGL") pipeline between NGL
fractionation infrastructure at Hutchinson, Kansas and Medford,
These initiatives would add to ONEOK Partners' profitability in
the long run, which will enable it to provide higher returns to
Though ONEOK Partners has strong financial position and numerous
prospective future growth projects, we are concerned about
unstable commodity prices, over-dependence on weather patterns,
and volatile equity and credit markets, which can challenge the
partnership's future performance.
ONEOK Partners and one of its peers
Buckeye Partners LP
) both currently have short-term Zacks Rank #3 (Hold).
Tulsa, Oklahoma-based ONEOK Partners, L.P. is one of the largest
publicly traded master limited partnerships and a leader in
gathering, processing, storage and transportation of natural gas
in the U.S.