Trades – ONEOK Partners LP (OKS) Purchase

OKE Partners - LogoDiversification be damned! Well, not really! However, with the markets on an absolute tear in 2013, especially in January, many of the stable, dividend growth stocks I would be looking to purchase have been priced above my preferred entry points. As such, I am forgoing some traditional investing sensibilities to open positions in attractively priced securities.

As such, today I purchased 28 shares of ONEOK Partners LP (OKS) for a total cost including commission of $1,499.59. This purchase increases my projected forward 12-month dividends by $79.52 and gives me a yield on cost (YOC) of 5.30%. These additional dividends bring my projected forward 12-month dividends from $721.76 to $801.28, and my portfolio’s YOC from 6.28% to 6.17%.

Because OKS is a master limited partnership (MLP), I have made this purchase in a taxable brokerage account. This allows me to maximize the benefits of a MLP by filing my portion of the net income/profits on my personal return, deferring a significant portion of the income generated by my investment. With MLPs, dividend payments are considered a return of capital as opposed to traditional dividends, thus subjecting them to different tax treatment. A nice Motley Fool summary on MLPs, their structure, and taxability, can be found here.

A quick OKS business summary from Bloomberg:

“ONEOK Partners, L.P., through a subsidiary limited partnership, owns a general partner interest in a master limited partnership. The partnership owns an interstate pipeline system that transports natural gas primarily in the upper Midwest and Mid Continent regions of the United States.”

Dividend Growth Investor recently wrote up a great analysis on OKS which can be found here.

I have updated my Investments page with this transaction.

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