Oneok Is Up 18% in 2026 and Currently Yields 4.8%. Is It Still Worth Buying?
Key Points
Oneok's stock has risen nearly 19% as of June 9.
The stock pays a quarterly dividend of $1.07 per share.
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Midstream energy company Oneok (NYSE: OKE) has had a strong start to 2026 in terms of stock performance. The company has risen more than 19% as of this writing. Oneok's dividend yield is still around 4.9%, but with the price increase, investors may be starting to question whether it's no longer a good time to buy.
Oneok, which owns and operates more than 60,000 miles of pipelines, processing plants, and storage facilities, raised its 2026 guidance after a strong first quarter. Net income and earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 12% and 13%, respectively. The annual dividend is now $4.28 per share. The company offers investors stability and growth through its diversified asset base.
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A 31% increase in natural gas liquids throughput volumes in the Permian and Gulf Coast segments was a large factor in the successful quarter.
Image source: Getty Images.
Of course, with strong earnings, the stock has risen, making valuation metrics less attractive to investors looking to buy in. However, one advantage for investors is that Oneok operates primarily on a fee-based business model, which provides revenue visibility and some stability across macroeconomic climates and volatile commodity prices. Approximately 90% of earnings were fee-based last year.
The stock's forward and trailing P/E ratios are both reasonable at just under 16. The PEG ratio has risen above 2, suggesting the stock may be overpriced, particularly compared to competitors such as Energy Transfer and Enterprise Products Partners. However, the valuation metrics don't support the notion that the company is no longer worth buying, especially considering the recent increase in guidance.
While the stock may not be a bargain at the moment, the energy company's longer-term outlook is good, and it offers a reasonable dividend for those seeking income.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners and Oneok. The Motley Fool has a disclosure policy.
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