This 4.9%-Yield Oil Pipeline Stock Is up 18% in 2026 -- and Still Looks Cheap

Core Viewpoint - OneOK operates as a midstream operator with a stable revenue model primarily based on pipeline usage fees, and it has shown significant growth through acquisitions and consistent dividend increases [1][4][5]. Financial Performance - Analysts expect OneOK to report fourth-quarter earnings per share (EPS) of $1.50, a decline of 4% year-over-year, with revenues forecasted at $8.9 billion, reflecting a 3% increase [3]. - For the first nine months of 2025, OneOK generated $4.1 billion in cash flow from operations and paid out $1.94 billion in dividends, achieving a coverage ratio of slightly better than 2:1 [7]. - The company reported adjusted EBITDA of $5.9 billion for the same period, marking a year-over-year increase of 27.4%, and EPS of $3.87, up 8% compared to the previous year [7]. Stock Performance and Dividends - OneOK's stock has risen approximately 18% in 2026, benefiting from an overall increase in the energy sector and the results of its recent acquisitions [4]. - The company has increased its dividend by 4% this year, marking the fourth consecutive year of dividend growth, with a current yield of around 4.9% [5]. - OneOK aims to grow revenue by 3% to 4% annually while maintaining a dividend payout ratio of 85% or lower [5][6]. Acquisitions - In recent years, OneOK has made significant acquisitions, spending $18.8 billion on Magellan Midstream in 2023, $2.6 billion on Medallion Midstream in 2024, and $4.3 billion on EnLink in January 2025 [4]. Market Conditions - Current geopolitical tensions, particularly between the U.S. and Iran, are contributing to rising oil prices, which may positively impact OneOK's stock performance despite anticipated lower EPS in the fourth quarter [8].