Key Takeaways
- Kinder Morgan’s second-quarter 2026 dividend of $0.2975 a share was 2% above a year earlier, and ONEOK announced an acquisition in August that it says gives it more room to raise its own.
- ONEOK yields 4.9% and Kinder Morgan yields 3.7%.
- Both cover their dividends more than twice over with distributable cash flow: 2.07x for Kinder Morgan and 2.25x for ONEOK in fiscal 2025, and 2.33x and 2.25x on fiscal 2026 consensus.
- What to watch: ONEOK’s plan to retire about $5 billion of debt, and whether its added flexibility becomes dividend raises.
Kinder Morgan (KMI) declared a quarterly dividend of $0.2975 a share on July 22, 2% above the same quarter of 2025.
ONEOK (OKE), the higher yielder of the two, made its own dividend news on Aug. 31. It announced an acquisition that it says gives it more room for dividend increases and share buybacks…
So for anyone hunting for pipeline income right now, which is the better dividend stock?
| Metric | Kinder Morgan (KMI) | ONEOK (OKE) |
|---|---|---|
| Dividend yield | 3.7% | 4.9% |
| Dividend growth, fiscal 2020–2025 | 2.2% a year | 2.0% a year |
| Distributable cash flow coverage, fiscal 2025 | 2.07x | 2.25x |
| Distributable cash flow coverage, fiscal 2026 consensus | 2.33x | 2.25x |
| Net debt/EBITDA (LTM) | 4.11x | 4.28x |
| Interest coverage (LTM) | 2.98x | 3.46x |
| Forward P/E (NTM) | 21.8x | 14.3x |
Kinder Morgan has cash to spare
Natural gas carried Kinder Morgan’s second quarter of 2026. Transport volumes were up 7% and gathering volumes up 26% from a year earlier, on LNG deliveries, exports to Mexico, power demand and Haynesville growth.
The dividend is well-covered. Distributable cash flow was $2.42 a share in fiscal 2025, 2.07x the $1.17 it paid. Consensus puts fiscal 2026 at $2.77, a wider 2.33x against $1.19. That 14% rise fits management’s own outlook: it expects to beat its 2026 budget by more than 5% on adjusted EBITDA and by more than 12% on adjusted EPS.
Coverage has stayed between 1.86x and 2.22x every fiscal year from 2019 to 2025.
All that cover hasn’t bought big raises. The dividend rose 1.7% in fiscal 2025, from $1.15 to $1.17. The growth is meant to come from the $9.6 billion project backlog. Executive Chairman Richard Kinder put the plan this way on the first-quarter call: “grow our EBITDA and EPS substantially over the coming years as these projects come online while still maintaining a strong balance sheet and growing our dividend.”
ONEOK pays more on similar cover
ONEOK’s cover is about as wide as Kinder Morgan’s, and it comes with a bigger check. Its second-quarter adjusted EBITDA rose 7% to $2.12 billion, and NGL raw feed throughput was up 7%. ONEOK raised the midpoint of its 2026 adjusted EBITDA guidance by $250 million to $8.35 billion.
Distributable cash flow was $9.25 a share in fiscal 2025, 2.25x the $4.12 it paid. Consensus puts fiscal 2026 at $9.69, also 2.25x against $4.31. That cover is fairly new. It climbed from 1.17x in fiscal 2020 to 2.25x in fiscal 2025, as distributable cash flow per share went from $4.36 to $9.25. Meanwhile the dividend held at $3.74 from fiscal 2020 to fiscal 2022.
The thinnest year on that chart, fiscal 2020, passed without a cut.
Raises have picked up since. The dividend rose 4.0% in fiscal 2025, from $3.96 to $4.12. ONEOK carries more debt than Kinder Morgan: net debt is 4.28x EBITDA over the last twelve months, against 4.11x. Alongside the August deal, though, it plans to retire about $5 billion of debt, which it says brings pro forma 2027 leverage to about 3.25x. CFO Walter Hulse expects the cash to stretch: “our expectation is free cash flow, there will be plenty for those, our dividend, our debt repayment as well as other forms of return to shareholders.”
So which dividend wins?
ONEOK is the better dividend stock. Both cover their dividends more than twice over, so the tiebreakers decide it, and ONEOK pays more and is raising it faster.
$10,000 in ONEOK pays $490 a year at its 4.9% yield, against $370 from Kinder Morgan at 3.7%. At each dividend’s fiscal 2025 pace, 4.0% and 1.7%, that grows to about $700 against about $432 in year 10. Even at their five-year rates, it’s about $583 against about $450. That’s a 5.8% yield on your cash against 4.5%, and Kinder Morgan’s income wouldn’t pass ONEOK’s for more than 30 years. ONEOK is also the cheaper stock, at 14.3x forward earnings against 21.8x.
Kinder Morgan’s dividend is still a safe one. Its 2.33x forward coverage is the wider of the two, and its leverage is lower on TIKR’s figures. It’s just that, with coverage this close, I’d rather collect ONEOK’s bigger, faster-growing check.
Of course, ONEOK still has to retire that debt and turn the flexibility it talks about into actual raises. Its next dividend increase is the one to watch.
So what is ONEOK stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what ONEOK could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
