ONEOK announced this week the extension of its share repurchase program saying its goal in the next few years is to acquire $2 billion in shares.
The board of directors said the effort will be made over the next four years, explaining the buyback will “complement the dividend growth rate as a key pillar of shareholder return in the state.”
ONEOK has also repurchased approximately $300 million of face value of its outstanding notes at a discount to par value during the fourth quarter of 2023 and finished the year with approximately $340 million of cash on hand. ONEOK said it remains committed to its previously stated target debt-to-EBITDA ratio of approximately 3.5 times.
The board also increased its quarterly dividend to 99 cents per share, an increase of 3.7%. This increase results in an annualized dividend of $3.96 per share.
The dividend is payable Feb. 14, 2024, to shareholders of record at the close of business Jan. 30, 2024. For future dividend increases, ONEOK expects to target an annual dividend growth rate ranging between 3% to 4%.
The company stated the combination of common dividends and share repurchases is expected to trend towards a target of approximately 75% to 85% of forecasted cash flow from operations after capital expenditures over the next four years, allowing NEOK to continue pursuing additional high-return growth opportunities, debt reduction or share repurchases.
“ONEOK is poised to generate substantial cash flow from operations in the coming years,” said Pierce H. Norton II,
ONEOK president and chief executive officer.
“Our commitment to capital-growth opportunities continues as our highest priority in our capital allocation strategy. This priority, combined with dividend growth and share repurchases, reinforces our commitment to maximizing total shareholder return and our belief that ONEOK represents a highly compelling investment opportunity,” added Norton.