This 4.7%-Yielding Energy Stock Reported Robust Earnings Growth and Sees More Growth Coming Down the Pipeline

Oneok (NYSE: OKE) recently reported robust first-quarter financial results. The energy midstream company delivered double-digit earnings growth, fueled by strong volumes. That enabled it to raise its full-year outlook.

Here's a closer look at the pipeline stock's first-quarter results and what it sees ahead.

Image source: Getty Images.

A strong start to the year

Oneok reported $776 million, or $1.23 per share, of net income, a 12% increase from last year. Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 13% to $2 billion.

The midstream company benefited from higher volumes. NGL raw feed volumes jumped 13%, refined products volumes shipped increased 12%, and natural gas volumes processed rose 5%. The company capitalized on strong market conditions, driven by supply disruptions in the Middle East from the Strait of Hormuz closure.

Oneok generated $934 million in cash during the period, easily covering the $673 million in dividends it paid. The pipeline company raised its dividend by 4% earlier this year and currently yields 4.7%.

More growth ahead

Oneok's strong start to 2026 and the expectation that market conditions will remain robust drove the company to increase its 2026 financial expectations. It now expects to generate between $8 billion and $8.5 billion of adjusted EBITDA this year, up from its prior guidance range of $7.9 billion to $8.3 billion. Oneok also raised its net income guidance range from $3.2 billion-$3.7 billion to $3.2 billion-$3.8 billion.

Meanwhile, the pipeline company remains in a strong position to continue growing beyond 2026. It's investing $2.7 billion to $3.2 billion across several growth capital projects this year. Notable projects include rebuilding the Medford Fractionator (in-service by the first quarter of 2027), the Bighorn Processing Plant (mid-year 2027), the Texas City Logistics Export Terminal and related MBTC Pipeline (early 2028), and the Eiger Express Pipeline (Mid-2028). Oneok is also pursuing several natural gas pipeline expansion opportunities to support growing power demand (including data center projects) and rising liquefied natural gas (LNG) demand.

Oneok's growth driver supports its outlook of increasing its dividend by 3% to 4% each year. The company has delivered over a quarter-century of dividend stability and growth.

High-octane total return potential

Oneok now expects to grow even faster this year, fueled by higher volumes. More growth is on the horizon as it completes its current slate of expansion projects. That will give it more fuel to grow its high-yielding dividend. That income and growth combo should enable Oneok to generate high-octane total returns in the coming years, making it a compelling energy stock to buy and hold for the long haul.

Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool recommends Oneok. The Motley Fool has a disclosure policy.