Buy ONEOK PARTNERS LP (OKS)

10/07/2008 3:46 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Investors who were worried that a bad quarter would lead ONEOK PARTNERS (OKS) to cut its dividend got reassurance in the first quarter of 2009. Adjusted earnings before interest, taxes, depreciation, and amortization fell almost 12% from the first quarter of 2008 and distributable cash flow dropped 15%. But Oneok Partners still managed to cover its distribution—and continued its aggressive $2 billion capital spending program. In 2009 a capital budget of $439 million has already put two pipeline extensions into operation and later this year the new Piceance Lateral and Arbuckle Pipeline are scheduled to go into service. As of July 1, the master limited partnership units paid a dividend of 9.4% And, as of that date, I’m upping my target price to $50 by March 2010 from my prior target of $47 by December 2009. (Full disclosure: I own units of ONEOK PARTNERS in my personal portfolio.)

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