Why ONEOK, Inc. Is a Solid Long-Term Dividend Stock

Many investors prefer to build a stock portfolio that combines stock with high yields in the short term and solid long-term dividend stocks. Combining your stocks in this way can contribute to your finances in both the short-term and the long-term. Buying dividend shares in companies that have good future prospects is a sensible investment, and there are many companies that have excellent long-term prospects in which you can invest that have both a proven track record for dividend payouts and are also predicted to continue on an upward trend in the years to come. To decide which are the best companies in which you should invest, it is important to look at their current situation, their past history, and what financial experts are predicting for their future. One company that experts say seems a solid bet is ONEOK, Inc. (NYSE:OKE). Here is an overview of the reasons why ONEOK, Inc. is a solid long-term dividend stock for you to consider adding to your portfolio.

ONEOK, Inc., is one of the largest energy midstream providers in the United States. Based in Tulsa, Oklahoma, this company was founded in 1906 and it was originally called Oklahoma Natural Gas Company. It changed its name to ONEOK in 1980 and then acquired Koch Industries’ natural gas businesses in 2005. It is also worth noting that this company is a diversified Fortune 500 corporation, says Wikipedia. According to NASDAQ, ONEOK, Inc. is an excellent momentum stock to buy. Momentum investing is all about following the trend of a company’s stock and then taking advantage of it when the stock has established a course, working on the assumption that the trend will continue.

Price Activity

NASDAQ says that one of the benchmarks of good momentum stock is the short-term stock price activity. ONEOK has seen recent hikes in the stock price, which is a good indicator that this is a good stock to buy now. However, long-term metrics are just as important. In the last year, ONEOK, Inc. shares have consistently beaten the market as they have risen by 21.65 percent compared to 14.97 percent for the S&P 500. The Motley Fool, also looks at ONEOK, Inc.’s current situation, stating that in 2018, the company delivered a total return of 20 percent. However, they also look at many other aspects of the business to determine if it is still a good long-term dividend stock option.

Cash Flow

They note that the company’s cash flow has grown significantly over the past year, due to a small acquisition and some recently completed expansion programs. They have also secured $6 billion worth of further expansion that should be completed by 2012, so the cash flow and earnings should continue to grow during that period.An element of security is added to buying this stock when you take into account the type of industry. Natural gas is something that is continuously in demand and will remain in demand in the coming years. Therefore, there is less risk that the company will go out of business due to lack of demand and a drop in profits. If anything, the demand for natural gas is inly likely to grow because of the move away from the use of coal. Similarly, most of the companies assets are regulated and protected because they are in the natural gas industry.

Of course, the company’s history also plays a huge part in the decision about whether to invest in this company or not. As this company was founded in 1906, it has a long and successful history in its industry. This has led to it becoming one of the leading natural gas companies in the United States. The main element of a company’s history to consider when thinking about investing in dividend stocks is the dividend payouts that investors have received in the past and how this will compare to future payouts. ONEOK, Inc, has a strong history in paying out dividends to its investors as it has done so for the past 30 years. In recent years, there have been consistent increases in these payouts at each quarter and year-on-year. Looking to the future, the diversification of the company, their acquisitions, and their strong cash flow means that analysts are predicting that this trend of increasing dividends is likely to continue over the coming years. For this reason alone, it is worth considering investing in ONEOK, Inc. dividend stocks.

Low Risk

Although some investors like to take risks, most prefer to invest in companies that are low-risk. By opting for low-risk investments, they can minimize the potential for not making money from their dividend stocks. In terms of risk, Seeking Alpha says that ONEOK, Inc. dividend stocks are one of the best low-risk options. This is because the correction of 2018 has created an opportunity for investors interested in dividend growth, and ONEOK, Inc. is one of the few stocks that wasn’t affected by this severe correction. In fact, Seeking Alpha believes that the stock is currently significantly undervalued. The company is also considered a low-risk due to the type of industry and the fact that ONEOK, Inc. is a well-established company.

Overall, the evidence points towards ONEOK, Inc. being a strong investment option for those who want long-term dividend stocks. The company has a long history and is in a secure industry. It currently has a good cash flow situation and the company is expanding and diversifying. These factors make it a low-risk investment option. Furthermore, this company offers high yields and they have a sound history of dividend payouts. If this trend continues, then this is a solid long-term dividend stock to add to your portfolio from which you are likely to reap the rewards in the future.