Will Hurricane Headwinds Slow ONEOK, Inc.'s Dividend Growth Momentum?

ONEOK (NYSE: OKE) believes it can deliver significant dividend growth for investors over the next several years thanks to the growing stream of cash flow it generates from its expanding portfolio of pipeline and natural gas processing assets. That said, it needs steady volumes flowing through its systems to earn those fees, which might not have happened to the extent it hoped in the third quarter due to Hurricane Harvey. As a result, cash flow might come in a bit under expectations when the company reports third-quarter results on Tuesday evening. However, even if that's the case, it doesn't appear as though one light quarter will derail plans to increase its dividend by 9% to 11% annually through 2021.

ONEOK's current guidance is that it will produce between $1.275 billion to $1.435 billion of distributable cash flow this year. At the midpoint, that's more than enough money to support the company's recently raised dividend by at least 1.2 times. So, even if cash flow comes in a bit light during the third quarter, it won't have any impact on its ability to support the current 5.6% yielding dividend.

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Source: Fool.com