Oneok (OKE +0.54%) is coming off a strong year. The pipeline company delivered double-digit earnings growth in 2026, fueled by higher volumes and its ability to continue capturing synergies from several acquisitions completed in recent years. It has now grown its earnings at a double-digit compound annual rate for the past several years.
While Oneok expects to continue growing in 2026, its growth rate will slow considerably. However, that doesn't mean the high-yielding pipeline stock has run out of fuel.
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High octane earnings growth in 2026
Oneok generated more than $8 billion in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) last year, an 18% increase from 2024. That marked the company's 12th consecutive year of growing its adjusted EBITDA, which has expanded at a 17% compound annual rate during that time frame. Oneok also grew its earnings per share by 11% and has grown it at a 13% compound annual rate since 2017.
The company benefited from higher volumes, fueled in part by the acquisitions of EnLink and Medallion in 2024. It also captured another $250 million of synergies from those deals and its purchase of Magellan Midstream. These positives more than offset the impact of lower commodity prices and some other headwinds.
NYSE: OKE
Key Data Points
A slowdown before a reacceleration
Oneok expects to generate between $7.9 billion and $8.3 billion of adjusted EBITDA this year, up slightly from last year at the midpoint. The company anticipates capturing an additional $150 million of cost savings, benefiting from higher volumes across its legacy operations, and completing its Denver refined products system expansion project. However, headwinds from higher corporate costs and lower commodity pricing in certain regions will offset much of that growth.
While Oneok's growth will slow to a crawl this year, it has more growth coming down the pipeline. The company expects to complete the rebuild of its Medford NGL Fractionator in two phases (fourth-quarter 2026 and first-quarter 2027 expected completion dates) and start-up its Bighorn Processing Plant by the middle of next year. Meanwhile, 2028 will be a big year for completing expansion projects. Oneok is investing $1 billion in a joint venture (JV) to build the Texas City Logistics export terminal and the related MBTC Pipeline. Both projects should enter commercial service in early 2028. The company is also part of a JV building the Eiger Express Pipeline, which should enter commercial service in mid-2028. The JV recently increased that project's capacity from 2.5 billion cubic feet per day (Bcf/d) to 3.7 Bcf/d.
These growth drivers support Oneok's plan to increase its 4.9%-yielding dividend by 3% to 4% each year. The pipeline company recently hiked its payout by 4% for 2026. It has now delivered over a quarter century of dividend stability and growth.
Plenty of fuel to continue growing the payout
Oneok has grown briskly over the past few years, fueled by organic expansion project completions and acquisitions. While its growth engine will slow to a crawl this year, it should reaccelerate by 2028 when two major projects enter commercial service. In the meantime, investors can continue collecting the company's high-yielding, steadily rising dividend, making it a solid income stock to buy.
