Many investors focus on either growth stocks or dividend stocks. However, the sweet spot is right in the middle. Over the last 50 years, dividend growth stocks have significantly outperformed companies that don't pay dividends and those that don't increase their payments.
Oneok (OKE +0.73%), Kinetik Holdings (KNTK +0.54%), and Williams (WMB +0.03%) currently pay dividends yielding between 3% and 8%, which is significantly higher than the S&P 500 (1.1% yield). All three pipeline companies recently raised their dividend payments, an ongoing trend that should continue.
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More than a quarter-century record of dividend stability and growth
Oneok recently raised its dividend payment by 4%. That pushed the pipeline company's yield to 5.5%. The diversified energy midstream company has delivered more than 25 years of paying stable to increasing dividends. While it hasn't increased its payment every year, Oneok has grown it by nearly 100% over the past decade, more than double the rate of its closest peers.
The company's target is to increase its dividend by 3% to 4% each year. It has two built-in growth drivers. Oneok has made three large-scale acquisitions over the past few years that it's working to integrate. The company estimates that it can still capture hundreds of millions of dollars in additional cost savings and commercial synergies from these deals in the coming years. Additionally, Oneok has several organic expansion projects underway that should come online through the middle of 2028. These commercially secured projects will provide it with incremental sources of stable cash flow to support its growing dividend. Meanwhile, Oneok has a strong financial profile, giving it ample flexibility to pursue additional expansion projects and bolt-on acquisitions to enhance and extend its growth profile.
NYSE: OKE
Key Data Points
This high yield is heading higher
Kinetik Holdings recently declared its latest dividend payment, which is 4% higher than the prior quarter's level. That payment hike boosted its yield to 8%. That's its second straight year of providing a 4% raise to its investors.
NYSE: KNTK
Key Data Points
The fully integrated Permian-to-Gulf Coast midstream company has been enhancing its operations in recent years through its capital recycling strategy. It has sold off its minority stakes in some non-operated long-haul pipelines (GCX in 2024 and EPIC Crude in 2025). The company reinvested the proceeds in bolt-on acquisitions (Durango in 2024) and in organic expansion projects (Kings Landing Complex). Kinetik has more growth ahead, notably to supply gas to power generation facilities. That should give it more fuel to increase its dividend.
Over 50 years and counting
Williams recently hiked its dividend payment by 5%. That pushed its yield up to 3.2%. The natural gas pipeline company has paid quarterly dividends since 1974. While Williams hasn't increased its dividend every year, it has been growing its payout at a mid-single-digit annual rate in recent years.
NYSE: WMB
Key Data Points
The gas infrastructure giant is in a strong position to continue increasing its dividend. It has a large backlog of organic expansion projects underway that should come online through 2030. Notable projects include three gas-fired power facilities to support surging electricity demand and a strategic partnership with Woodside Energy to invest in its Louisiana LNG project and build a related pipeline to support the facility. Williams is pursuing a long list of additional gas pipeline expansions and power innovation projects. It should have plenty of fuel to continue increasing its dividend in the coming years.
Compelling income and growth combos
Oneok, Kinetik, and Williams offer investors the best of both worlds. They pay high-yielding dividends that should continue growing in the coming years. That should give these pipeline companies the fuel to deliver high-octane total returns, making them compelling long-term investment opportunities.
