OKE vs PSX: Dividend Comparison
Dividend data as of
Oneok Inc /New/ (OKE) and Phillips 66 (PSX) are both in the Energy sector, making them natural rivals for dividend investors. OKE offers a significantly higher 4.94% yield compared to PSX's 3.02%, a gap of 1.92%. For dividend growth, OKE leads with a 5-year CAGR of 10.1% versus PSX's 7.0%. PSX holds the edge in dividend safety with a "Safe" rating. PSX is a Dividend Contender with 13 years of consecutive increases.
Verdict
Yield Analysis
OKE yields 1.92% more than PSX. In dollar terms, OKE pays $4.12/share vs PSX's $4.75/share annually.
Dividend Growth
OKE: Dividend growth is accelerating — the 3-year CAGR of 19.9% exceeds the 5-year rate of 10.1% and the 10-year rate of 9.3%.
PSX: Dividend growth is slowing — the 3-year CAGR of 6.3% trails the 5-year rate of 7.0% and the 10-year rate of 10.8%.
Dividend Safety
OKE: The payout ratio of 75% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x.
PSX: The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in OKE vs PSX today?
At $86.11 per share, $10,000 buys about 116.1 shares of Oneok Inc /New/ (OKE). Each share pays $4.12 per year in dividends, so the position starts out generating roughly $478 per year — about $40 a month.
At $159.16 per share, $10,000 buys about 62.8 shares of Phillips 66 (PSX). Each share pays $4.75 per year in dividends, so the position starts out generating roughly $298 per year — about $25 a month.
OKE is the larger income stream from day one: $180 per year more on the same $10,000 invested.
What could $10,000 of OKE or PSX income look like in 10 years?
Oneok Inc /New/ (OKE) has raised its dividend about 10.1% a year over the past five years. If that pace held, the $494 per year that $10,000 generates today at the current 4.94% yield would reach $1,291 per year by 2036 — a 12.9% yield on the original cost.
Phillips 66 (PSX) has raised its dividend about 7.0% a year over the past five years. If that pace held, the $302 per year that $10,000 generates today at the current 3.02% yield would reach $596 per year by 2036 — a 6.0% yield on the original cost.
On those trailing rates, OKE pays more in 2036: $1,291 versus $596 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would PSX's dividend growth overtake OKE's higher yield?
It doesn't, on the trailing numbers. Oneok Inc /New/ (OKE) yields more today (4.94% vs 3.02%) and has also grown its dividend at least as fast (10.1% vs 7.0% a year over five years). Unless PSX accelerates its raises or OKE stumbles, PSX never closes the income gap — OKE wins on both current income and growth.
Can OKE and PSX afford their dividends?
Oneok Inc /New/ (OKE) earns $5.44 per share against $4.12 paid out in dividends — 1.3x coverage (a 75% payout ratio).
Phillips 66 (PSX) earns $10.79 per share against $4.75 paid out in dividends — 2.3x coverage (a 44% payout ratio).
PSX's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for OKE if earnings weaken.
Which fits an early-retirement income portfolio better, OKE or PSX?
For income you need right now, Oneok Inc /New/ (OKE) leads: $100,000 invested today pays about $411 a month at the current 4.94% yield, versus $252 a month from Phillips 66 (PSX) at 3.02%.
OKE also leads on dividend growth (10.1% vs 7.0% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: PSX has raised its dividend 13 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $2,090/yr in OKE vs $802/yr in PSX by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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