Smart Dividend Portfolio Edition #86: Cash Crown

Shrilekha Pethe on November 10, 2025

Dear Investor,

Welcome to the 86^thedition of TipRanks’ Smart Dividend Portfolio & Newsletter.

Market-Moving News: Nov 10, 2025

Markets ended the volatile week in the red. The Dow Jones Industrial Average (DJIA) was down 1.21%, the S&P 500 (SPX) fell 1.63%, and the large-cap tech benchmark Nasdaq-100 (NDX) tumbled 3.09%, its worst week since April.

Last week was a difficult one for the broad stock markets and brutal for tech stocks, as concerns over an “AI bubble” resurfaced with a vengeance. With the “Magnificent Seven” now making up 36% of the S&P 500’s market cap, any sign of trouble within the pack weighs heavily on the rest.

For weeks, Wall Street CEOs have been warning about too-hot valuations among the AI industry, predicting that a correction is imminent. What drove this message in seems to be a $1.1 billion short bet by Michael Burry – known for his shorting the market before the 2007 mortgage crisis – against Nvidia (NVDA) and Palantir (PLTR). Burry’s fund, Scion Asset Management, simultaneously revealed large long bets on Pfizer (PFE) and Halliburton (HAL) – two “old economy” large caps trading at depressed valuations.

Eight leading AI trades – including Nvidia, Meta (META), Palantir, and others – lost nearly $1 trillion in combined market cap over the last week. Still, these behemoths together wield capitalization of $23 trillion, nearing the size of the U.S. GDP. Their monstrous AI capex is already beginning to move the needle on the economy, and despite the real, palpable value of the underlying tech, this setup looks increasingly bubbly. With speculations abundant amid the accelerating importance of technology leaders for the broad economy, the White House stepped in to warn that “there will be no federal bailout for AI,” no matter what.

According to the preliminary UoM survey, U.S. consumer sentiment dropped in November to 50.3 – just above the all-time low of 50.0 set in 2022 – as households are getting increasingly worried that the government shutdown that’s been dragging on for over a month will negatively impact the economy.

While the official data is still absent due to the said shutdown, private reports support these concerns. According to data provided by Challenger, last month was the most layoff-heavy October in over 20 years. Tech companies like Amazon (AMZN) and Meta (META) are slashing their workforce en masse to reroute funds into AI investments, while firms in other industries – including UPS (UPS), Target (TGT) , and others – reevaluate spending routes amid rising costs and demand uncertainties.

Still, the hit to employment and the falling consumer confidence threatening to depress spending raised bets on another rate cut at the Federal Reserve’s next meeting in December. That led to Friday’s upward reversal, with the S&P 500 inching into positive territory by market close. However, November – statistically known as the best month for stocks – has started out on the wrong foot.

This Week’s Quality Dividend Stock Idea

ONEOK (OKE) is a leading U.S. midstream energy company engaged in gathering, processing, transporting, and storing natural gas and natural gas liquids (NGLs). Its operations span a large integrated pipeline network across key shale basins, including the Permian, Bakken, and Mid-Continent regions. By connecting energy supply from these production areas to end-use markets, ONEOK provides critical infrastructure and has become one of the largest NGL system operators in North America.

Pipeline Legacy

ONEOK’s origins date back to 1906, when it was founded as the Oklahoma Natural Gas Company to supply gas to homes and businesses across the state. Over the decades, the company expanded its distribution and transmission network throughout the Mid-Continent, laying the foundation for its evolution into a major midstream operator. In 1980, it reorganized as ONEOK, marking its transformation from a regional utility into a diversified energy infrastructure company.

Through the 1990s and early 2000s, ONEOK pursued a series of strategic acquisitions to strengthen its footprint in natural gas gathering, processing, and transportation. A defining step came in 2005 with the purchase of Northern Border Partners, which marked its entry into the NGL business, a segment that would become its primary earnings driver.

In 2013, ONEOK spun off its natural gas distribution subsidiaries – Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service – into a separate publicly traded company, ONE Gas, allowing it to focus entirely on midstream operations. This shift positioned ONEOK for faster growth in higher-margin, fee-based businesses.

A pivotal milestone followed in 2017, when ONEOK acquired all outstanding common units of ONEOK Partners in a $9.3 billion merger. Prior to this deal, ONEOK and ONEOK Partners operated as separate entities: ONEOK owned a stake in the Master Limited Partnership (MLP), which held much of the midstream assets, while investors in the MLP held units with a separate governance structure and distribution model. The deal consolidated its MLP structure, simplifying governance and creating a stand-alone midstream company with enhanced dividend growth potential and a more resilient balance sheet.

Another transformative step came in 2023 with the acquisition of Magellan Midstream Partners was transformative, creating a fully integrated midstream operator with diversified exposure across natural gas liquids, natural gas, and refined products infrastructure. The company further strengthened its Permian Basin presence with the acquisition of EnLink Midstream and Medallion Midstream, key crude oil and gas gathering systems in the region.

In 2025, OKE acquired the remaining 49.9% stake in a Delaware Basin joint venture from NGP XI Midstream Holdings, gaining full ownership of its natural gas gathering and processing operations in one of the most productive U.S. basins. That same year, ONEOK sold three non-core pipelines –Guardian, Midwestern Gas Transmission, and Viking Gas Transmission – to DT Midstream for $1.2 billion as part of a portfolio optimization effort.

Together, these transactions have significantly expanded ONEOK’s scale, throughput volumes, and earnings power while sharpening its focus on core NGL, natural gas, and gathering operations. Today, ONEOK stands among the largest midstream energy companies in North America, supported by an extensive, strategically located pipeline network and a business model centered on stable, fee-based cash flows and disciplined capital allocation.

Flow Engine

ONEOK operates an integrated midstream business that generates stable, fee-based earnings by transporting, storing, processing, and gathering natural gas and NGLs across North America. The company’s 60,000-mile pipeline and processing network links key production basins, such as the Permian, Bakken, and Mid-Continent, to customers in the petrochemical, refining, and utility sectors. This infrastructure enables efficient, reliable movement of energy products across the value chain and supports continued operational growth.

The company operates primarily through four integrated business segments: NGLs, Natural Gas Gathering and Processing (G&P), Natural Gas Pipelines, and Refined Products and Crude. The NGL segment – its largest earnings contributor – generates revenue from gathering mixed NGLs from processing plants and separating (fractionation) them into purity products (like ethane, propane, and butane), and transporting them to end markets under long-term, fee-based contracts. The G&P segment provides essential gathering and processing services for natural gas producers, earning fees based on volumes handled and natural gas liquids extracted. The Pipelines segment transports natural gas across interstate and intrastate networks, supporting steady, regulated-like cash flows through contracted capacity and long-term ship-or-pay agreements. The Refined Products and Crude segment covers the transportation, storage, distribution, and marketing of refined petroleum products (such as gasoline, aviation fuel, distillates) and crude oil.

ONEOK’s business is built for durability, with approximately 90% of its earnings derived from fee-based contracts, limiting direct exposure to commodity price volatility. This model ensures predictable cash flow even during market downturns. The company’s recent expansion, including its acquisition of Magellan Midstream Partners and subsequent Permian Basin deals, has diversified its earnings base beyond NGLs and gas to include refined products infrastructure, further strengthening revenue stability.

Looking ahead, ONEOK’s growth prospects are underpinned by rising U.S. energy production, increasing NGL exports, and continued infrastructure demand in key shale regions.

Volume Velocity

ONEOK reported strong growth across key business segments in Q3 FY25, underscoring its expanding scale and operational strength. NGL volumes climbed in both the Permian Basin and Rocky Mountain regions, with the latter reaching record levels of over 490,000 barrels per day. Fractionation operations at Mont Belvieu are back to full capacity after a brief outage, and ethane recovery remains strong, helped by lower regional gas prices that make extraction more economical.

In the Permian Basin, processing volumes rose 5% sequentially, supported by 20 active rigs on dedicated acreage and 550 million cubic feet per day (MMcf/d) of additional processing capacity under development. The Mid-Continent and Rocky Mountain regions also saw higher volumes, with 11 and 16 rigs in operation, respectively, indicating sustained production momentum. These trends highlight that, despite fluctuations in commodity prices, ONEOK is successfully leveraging active drilling and infrastructure growth to maintain stable and growing throughput across its natural gas liquids network.

In refined products and crude, volumes improved seasonally, and liquid blending¹ rose 15% year-to-date, driven by synergies from the Magellan and EnLink integrations. By expanding connectivity between its Mont Belvieu, Houston, Conway, and Mid-Continent terminals, ONEOK can move more products efficiently and capture higher transportation and blending margins. The rise in liquid blending volumes shows that the company’s integration of Magellan and EnLink assets is already creating tangible financial synergies. These synergies, coupled with the integration of recent acquisitions, are expected to contribute roughly $250 million in earnings in 2025.

Strategically, ONEOK is positioning itself to benefit from the growth in LNG exports and rising power demand from AI-driven data centers, with multiple projects under evaluation near its pipeline infrastructure. The company’s Sunbelt Connector and Eiger Express pipeline projects expand its ability to move natural gas and NGLs efficiently from the Permian Basin, one of the most productive oil and gas regions in the U.S., to the Gulf Coast markets, where demand is growing for industrial, petrochemical, and export applications. These projects increase capacity, reduce bottlenecks, and strengthen the company’s strategic footprint in key production and demand regions.

The company’s management noted that drilling activity from oil and gas producers across its operating regions remains strong enough to keep production volumes steady, with potential for modest growth in the coming quarters. Even if crude oil output levels off, improving gas-to-oil ratios – meaning more natural gas is produced for every barrel of oil – should support higher gas and NGL volumes through ONEOK’s system. The company also pointed to productivity gains from advanced drilling techniques, which allow producers to extract more from each well, further stabilizing throughput across its pipelines and processing assets.

In addition, ONEOK sees major long-term opportunities in liquefied petroleum gas (LPG) exports as global demand for cleaner fuels rises. The company is exploring ways to commercialize and expand its export capabilities, using its coastal infrastructure to reach international buyers. It is also evaluating pipeline capacity expansions to move more gas to the Gulf Coast, where it can supply growing LNG export facilities.

Overall, management reiterated confidence in the company’s ability to generate steady growth through its integrated asset base, disciplined capital management, and resilience across commodity cycles – positioning ONEOK as a well-diversified and forward-focused midstream operator heading into 2026.

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1-Liquid blending refers to the process of combining different types of refined petroleum products –such as gasoline components, butane, or natural gas liquids (NGLs), to create finished fuels that meet regulatory and market specifications.

Pipeline Profits

Over the past three years, ONEOK has delivered solid growth, with revenues and EPS rising at a CAGR of 11.5% and 14.6%, respectively. This performance has been fueled by strategic acquisitions, organic volume expansion, and steady investments in midstream infrastructure across high-growth natural gas and NGL-producing regions.

In Q3 2025, ONEOK reported another strong quarter, highlighting the success of its integration efforts following the EnLink and Medallion acquisitions. The company posted net income of $940 million, or $1.49 per share, both exceeding estimates and rising from $693 million a year earlier, while adjusted EBITDA surged 37% year over year to $2.12 billion. Growth was broad-based, supported by volume gains in the Rocky Mountain and Mid-Continent regions and continued strength across its integrated network.

By segment, the Natural Gas Liquids unit generated $748 million in adjusted EBITDA, up 20% from last year, driven by higher volumes and improved marketing margins. The Refined Products and Crude segment rose 32% to $582 million, reflecting contributions from newly integrated assets, while Natural Gas Gathering and Processing nearly doubled to $566 million. The Natural Gas Pipelines segment maintained stable performance at $200 million.

Operating cash flow climbed to $4.05 billion in the first nine months of 2025, compared to $3.28 billion a year earlier, reflecting stronger earnings and disciplined working capital management. ONEOK ended the quarter with $1.2 billion in cash, and retired $500 million in senior notes in Q3, with $1.3 billion total debt extinguished year-to-date, and a debt-to-EBITDA ratio of 4.32x, higher than the industry median but consistent with its acquisition-driven growth strategy. The company retains investment-grade credit ratings of “Baa2” from Moody’s and “BBB” from S&P and Fitch, underscoring its stable financial profile.

Looking ahead, ONEOK reaffirmed its 2025 guidance, targeting net income of $3.41 billion and adjusted EBITDA of $8.23 billion at the midpoint. OKE’s long-term leverage target remains at 3.5x, a level the company expects to reach on a run-rate basis by the fourth quarter of 2026, highlighting its commitment to maintaining balance sheet discipline. Management also noted continued strong ethane recovery across its system, a trend likely to persist into early Q4, reflecting sustained demand in its natural gas liquids segment. Capital expenditure guidance for 2025 remains $2.8-$3.2 billion with a focus on growth projects, mainly pipeline and processing capacity expansions.

Yield King

OKE has established a strong reputation for rewarding shareholders through consistent and steadily growing dividends, a testament to its fee-based midstream business model and reliable cash generation. The company has paid uninterrupted dividends for over 50 years, earning its status as a Dividend King, and has raised payouts for the past three consecutive years. During the COVID-19 pandemic, management temporarily paused dividend growth to preserve liquidity amid economic uncertainty, reflecting a prudent approach to capital allocation.

For the most recent quarter, ONEOK declared a quarterly dividend of $1.03 per share, or $4.12 annually, equating to a dividend yield of 6.05%, well above the midstream industry average of roughly 3.2%. The company distributes around 75% of adjusted earnings to shareholders. Additionally, in January 2024, the Board authorized a $2 billion share repurchase program running through January 2029. During the third quarter of 2025, ONEOK repurchased $45 million of its stock under this authorization, reinforcing its balanced approach to shareholder returns.

From a valuation standpoint, ONEOK appears attractively priced relative to both its history and its peers. The stock currently trades at more than a 15% discount to its trailing and forward non-GAAP P/E ratios, forward EV/EBITDA, price-to-book, and price-to-cash flow ratios. When compared with key midstream rivals such as Kinder Morgan and Williams Companies, OKE is in the low valuation range based on non-GAAP trailing and forward P/E ratios and forward EV/EBITDA. This suggests that the market may be undervaluing OKE’s strong cash flow generation, stable earnings base, and integrated asset footprint.

Analysts remain broadly positive on OKE, citing its expanding Delaware basin processing capacity from 0.3 billion cubic feet per day (bcf/d) to 1.1 bcf/d by 2027, strengthening its ability to capture rising natural gas volumes while the EnLink asset integration continues to boost Natural Gas gathering and processing (G&P) volumes in the Mid-Continent and Rocky Mountain regions.

Consensus estimates point to approximately 26% upside from current levels, with some projections suggesting potential gains of up to 62%. A discounted cash flow (DCF) analysis further supports the view that OKE’s stock is undervalued, trading roughly 50% below its intrinsic value, implying meaningful long-term upside for investors.

Investing Takeaway

ONEOK has built a strong reputation for rewarding shareholders through a combination of consistent dividends and disciplined capital allocation. Its fee-based midstream business model generates stable, predictable cash flows, allowing the company to maintain uninterrupted dividend payments for over five decades and steadily increase payouts in recent years. Even during periods of economic uncertainty, management has prioritized liquidity while balancing shareholder returns, demonstrating a prudent and resilient approach. Beyond dividends, the company complements its income strategy with share repurchases, reinforcing its commitment to returning capital to investors. With a diversified, integrated asset base spanning natural gas, NGLs, and refined products, ONEOK’s cash flow stability positions it as an attractive income-focused investment. For investors seeking reliable and growing dividend income underpinned by a durable midstream business, ONEOK offers a compelling long-term opportunity.

Dividend Investor Portfolio

Portfolio News

▣ Amgen (AMGN) delivered a solid third-quarter performance for the period ending September 30, 2025, driven by strong product demand and steady financial execution. The company reported revenue of $9.56 billion, a 12% year-over-year increase, surpassing consensus estimates. Adjusted EPS rose 1% from the prior year to $5.64, also coming in ahead of expectations. Growth was fueled by robust 14% volume gains across Amgen’s key therapies, highlighted by a 40% surge in Repatha, its cholesterol treatment, and a 36% increase in Evenity, its osteoporosis drug. Reflecting this momentum, Amgen raised its full-year 2025 sales outlook to $36.2 billion at the midpoint, up from $35.5 billion previously and above consensus estimates. Adjusted EPS guidance was lifted to $21 per share at the midpoint, signaling management’s confidence in sustained growth. The company also generated $4.2 billion in free cash flow, up from $3.3 billion a year earlier, underscoring its strong liquidity and operational efficiency.

▣ EOG Resources (EOG) entered the third quarter riding strong operational momentum, buoyed by its acquisition of Encino Acquisition Partners and a diverse multi-basin portfolio. In the third quarter, the company delivered an adjusted net income of $2.71 per share, beating the Street’s expectation of roughly $2.46. Production soared to about 1.301 million barrels of oil equivalent per day (MBoed), topping the guidance midpoint.

Meanwhile, free cash flow reached around $1.4 billion, enabling nearly $1 billion in returns to shareholders through dividends and buy-backs. In its guidance, EOG forecast fourth-quarter production of 1.36 MBoed and full-year production of 1.22 MBoed, both at midpoint, signaling confidence in its multi-basin asset portfolio and cost discipline. In short, strong volumes, disciplined spending, and meaningful shareholder returns made the quarter a win despite commodity headwinds.

▣ ExxonMobil (XOM) announced that its ex-dividend date is November 14, and its dividend will be paid on December 10.

▣ IBM (IBM) announced that it had advanced to Stage B of the Defense Advanced Research Projects Agency (DARPA) Quantum Benchmarking Initiative, marking a key milestone in its quantum computing roadmap. The initiative aims to develop reliable performance benchmarks for quantum systems compared to classical computers, a crucial step toward measuring real-world advantages of quantum technology. IBM’s continued progress in the program highlights its growing leadership in frontier technologies. This development reinforces IBM’s strategic focus on high-value innovation areas beyond traditional IT services, positioning it for potential growth in next-generation computing markets.

Meanwhile, the company announced that its ex-dividend date is November 10, and its dividend will be paid on December 10.

▣ Kroger (KR) announced that its ex-dividend date is November 14, and its dividend will be paid on December 1.

▣ PhilipMorris (PM) announced a major corporate reorganization aimed at sharpening its strategic focus and accelerating its transition toward a smoke-free future. Effective January 1, 2026, the company will consolidate its operations into two business units – PMI International and PMI U.S. – to better align with its expanding global footprint and growing U.S. presence following the acquisition of Swedish Match. Alongside this, Philip Morris will introduce a new financial reporting structure consisting of three operating segments: International Smoke-Free, International Combustibles, and U.S. This new structure is designed to provide greater transparency into performance across traditional and reduced-risk product categories. The company expects the reorganization to enhance operational agility, streamline decision-making, and support its long-term goal of deriving the majority of its revenue from smoke-free products by 2030.

▣ Qualcomm (QCOM) For the quarter ended September 28, 2025, the company reported revenue of $11.3 billion, up 10% year-over-year, driven by robust demand in its QCT business and beat estimates. Adjusted earnings per share grew by 12% year-over-year to $3.00, beating expectations and reflecting broad-based growth across handsets (+14% to ~$7 billion), automotive (+17% to ~$1.05 billion), and Internet of Things (IoT) (+7% to ~$1.81 billion).

Despite reporting a GAAP net loss due to a non-cash tax charge of $5.7 billion, the company emphasized that this one-time item does not impact the underlying operational momentum. Looking ahead, Qualcomm guided Q1 FY 2026 revenue of $12.2 billion and adjusted EPS of $3.40, both at midpoint and above analyst consensus—signaling confidence in its diversified technology roadmap and structural growth drivers.

▣ VICI Properties (VICI) announced the acquisition of the real estate assets of seven casino properties from Golden Entertainment for $1.16 billion. The deal includes well-known properties such as The STRAT Hotel, Casino & Tower on the Las Vegas Strip, along with Arizona Charlie’s, Aquarius Casino Resort, and Edgewater Casino Resort. Golden Entertainment will continue operating the casinos under a 30-year lease with VICI, paying $87 million in annual rent, which will increase by 2% each year starting in year three. The transaction expands VICI’s presence in the local Las Vegas market, adds a new long-term tenant, and boosts income stability through predictable, long-term lease payments.

Recent Trades

None at the moment, although we are considering adding a stock to our portfolio when the market conditions allow for an attractive entry point. Stay tuned.

Portfolio Attributes

Dividend Portfolio Yield	Expected Dividend Growth	Expected Annual Income
3.96%	+5.98%	$5,904.22
Yield-on-Cost Adjusted, Weighted	Average Analyst 12-Month Growth Outlook	10K Per Stock at the Time of Purchase

Current Portfolio

Name	EX-Dividend Date	Payment Date	Yield on Cost	Annual DPS
Automatic Data Processing (ADP)	Dec 11, 2025	Jan 01, 2026	2.46%	$6.16
Amgen (AMGN)	Nov 21, 2025	Dec 12, 2025	3.27%	$9.52
BlackRock (BLK)	Dec 04, 2025	Dec 23, 2025	2.61%	$20.84
Bank of Nova Scotia (BNS)	Jan 07, 2026	Jan 29, 2026	5.98%	$3.21
EOG Resources (EOG)	Jan 16, 2026	Jan 30, 2026	3.06%	$4.08
ExxonMobil (XOM)	Feb 12, 2026	Mar 10, 2026	3.64%	$4.12
IBM (IBM)	Feb 10, 2026	Mar 10, 2026	3.14%	$6.72
JPMorgan Chase (JPM)	Jan 06, 2026	Jan 29, 2026	3.43%	$6.00
Kroger (KR)	Feb 17, 2026	Mar 03, 2026	3.08%	$1.40
Lockheed Martin (LMT)	Dec 02, 2025	Dec 29, 2025	2.85%	$13.80
PepsiCo (PEP)	Dec 09, 2025	Jan 06, 2026	3.8%	$5.69
Philip Morris (PM)	Dec 26, 2025	Jan 13, 2026	6.06%	$5.88
Qualcomm (QCOM)	Dec 08, 2025	Dec 22, 2025	2.36%	$3.56
VICI Properties (VICI)	Dec 17, 2025	Jan 09, 2026	5.22%	$1.8
Verizon (VZ)	Jan 12, 2026	Feb 03, 2026	6.09%	$2.76

NameEX-Dividend DatePayment DateYield on Cost Annual DPS

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Click here for more stock market analysis from TipRanks Macro & Markets research analyst Yulia Vaiman

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Category: Dividend