ONEOK (OKE): How Investors Who Missed Out on This Strategic Acquisition Play Have Fared

A Five-Year Performance Breakdown

Over the past five years, ONEOK has transformed itself into a diversified midstream energy infrastructure giant through an aggressive acquisition strategy. The results speak for themselves when examining returns against the broader market.

Performance Comparison:

*Includes reinvested dividends (current yield: 5.4%) Data source: Ycharts

While short-term performance has disappointed investors, those who held their positions over the full five-year window have significantly outperformed the S&P 500—particularly when accounting for ONEOK’s substantial dividend contributions.

From Specialized to Fully Integrated Platform

ONEOK’s remarkable transformation began with a strategic vision to expand beyond its three traditional business lines: natural gas gathering and processing, natural gas pipelines, and natural gas liquids (NGLs).

The Major Acquisition Timeline:

The turning point arrived in 2023 when ONEOK acquired Magellan Midstream Partners for $18.8 billion, instantly adding refined products, crude oil, and export terminals to its portfolio. This transformative deal established the foundation for a truly integrated midstream platform.

The following year proved equally aggressive: ONEOK purchased Medallion Midstream and a 43% stake in EnLink for $5.9 billion, strategically positioning the company in the high-growth Permian Basin and expanding its regional footprint.

In 2024, the company completed the remaining EnLink acquisition for $4.3 billion, solidifying control of this critical asset. Beyond these marquee deals, ONEOK executed targeted bolt-on acquisitions, including NGL pipelines from Easton Energy ($280 million) and its joint venture partner’s stake in a Delaware Basin operation ($940 million).

The Earnings Impact and Synergy Potential

These strategic transactions have driven substantial earnings growth and positioned ONEOK for continued expansion. Management expects to capture hundreds of millions in additional merger synergies over the coming years—value that hasn’t yet been fully realized by investors.

Beyond synergies, ONEOK has greenlit multiple organic growth capital projects scheduled to come online through mid-2028. These investments should support annual dividend increases of 3% to 4%, while potentially generating the robust total returns that have historically attracted income-focused investors.

The Investment Perspective

For investors who didn’t miss out on ONEOK’s five-year bull run, the thesis remains compelling: a company that has successfully executed an ambitious consolidation strategy, operates a high-quality asset base across key energy corridors, and commits to consistent dividend growth.

The challenge for new entrants is whether the best returns lie behind or ahead—a question the company’s organic growth pipeline and synergy capture could answer over the next several years.