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One Gas ups quarterly dividend, expects YOY increase in net income for 2019

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One Gas ups quarterly dividend, expects YOY increase in net income for 2019

One Gas Inc. declared a quarterly dividend of 50 cents per share for the first quarter of 2019, an increase of 4 cents, or 8.7%, over the prior quarter, while expecting its net income for the year in the range of $174 million to $190 million.

The dividend increase resulted in an annualized dividend of $2.00 per share, according to a Jan. 15 news release. The new dividend will be paid March 8 to shareholders of record at the close of business Feb. 22.

The Tulsa, Okla.-based utility forecast an annual dividend increase of 7% to 9% through 2023 and targets a dividend payout ratio of between 55% and 65% of net income, all subject to board approval.

In a separate same-day release, One Gas released its 2019 net income forecast in the range of $174 million to $190 million, or $3.27 to $3.57 per share, with a midpoint of $182 million, or $3.42 per diluted share. In 2018, One Gas posted net income of $163.0 million, or $3.08 per share.

The 2019 guidance takes into account new rates, normal weather conditions and higher depreciation expense from increased capital investments, as well as the Oklahoma Corporation Commission's recent order requiring Oklahoma Natural Gas Co. to return tax cut-related savings to customers.

The utility estimated its capital expenditures for 2019 at $450 million, about 70% of which would go to system integrity and replacement projects. It also updated its five-year capex forecast, which is now in the range of $450 million to $500 million per year through 2021.

Net income and earnings per share are expected to grow by an average of 6% to 8% per year between 2018 and 2023, while rate base is projected to increase by an average of 6% and 7% per year in the same period.

One Gas also announced its guidance on 2018 net income of $3.23 to $3.27 per diluted share, compared with the previously announced range of $3.15 to $3.35 per diluted share.

One Gas provides natural gas distribution services to over 2 million customers in Oklahoma, Kansas and Texas.