Key Takeaways
- A hypothetical $1,000,000 split evenly across Hormel Foods, AT&T and ONEOK pays $50,759 a year in dividends, or $4,269 a month.
- ONEOK’s check looks safe and growing, AT&T’s looks safe but flat, and Hormel’s looks stretched.
- Hormel’s dividend took 82% of its free cash flow over the twelve months to July 2026, and more than all of it in fiscal 2025.
- If Hormel halved its dividend, the income would fall to $3,538 a month, so Hormel’s full-year report is the one to watch.
Retirees hunting for income don’t have to look far for a big yield right now. Hormel Foods (HRL), AT&T (T) and ONEOK (OKE) yield between 4.98% and 5.27% at Monday’s midday prices.
Let’s take a hypothetical 70-year-old retiree who splits $1,000,000 evenly across the three, with $95.90 left over. Together, they pay $51,230.01 a year in dividends, or $4,269.17 a month.
That’s a very nice paycheck. But each check is only as safe as the cash behind it:
StockSharesCostIncome a yearShare of incomeCoverageHormel Foods (HRL)15,008$333,322.22$17,551.1734%82% of free cash flow (TTM to July 26, 2026)AT&T (T)15,196$333,323.40$17,089.5633%44% of free cash flow (TTM to Sept. 30, 2026); 46% (2026 consensus)ONEOK (OKE)3,816$333,258.48$16,589.2832%2.25x distributable cash flow (fiscal 2025); 2.30x (2026 consensus)
Source: TIKR and StockAnalysis. Prices at 1:09 PM EST on Nov. 9, 2026, and dividends at each company’s current rate.
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Hormel has the record and the thinnest cushion
StockAnalysis counts 60 straight years of Hormel dividend raises, and its Sept. 28 declaration was its 393rd consecutive quarterly dividend. The raises have gotten smaller, though: 4.5% a year from fiscal 2020 to fiscal 2025, from $0.93 a share to $1.16.
The cash behind it is thinner. Dividends took 82% of free cash flow over the twelve months to July 26, 2026. In fiscal 2025 they took 118.5%: $633 million paid against $534 million of free cash flow.
Hormel Foods (HRL): free cash flow vs. common dividends paid, $ millions, fiscal 2016–2025 (years to October) (TIKR)
Fiscal third-quarter sales slipped to $2.96 billion from $3.03 billion a year before, as retail lost volume, partly due to Hormel’s exits from whole-bird turkey and private-label snack nuts. Still, management raised its fiscal 2026 adjusted EPS guidance to $1.45 to $1.51.
“Certainly, the dividend continues to be very important to us,” John Ghingo said on that call. He became CEO on Oct. 26. Hormel is also buying chicken maker Brakebush Brothers for $1.055 billion with cash on hand and new debt, and it expects the deal to close in its fiscal first quarter of 2027.
AT&T has cash to spare
AT&T’s check has plenty of cash behind it, but no growth. The dividend fell from $2.08 a share in fiscal 2020 to $1.11 in fiscal 2025. Management plans to keep it at $1.11 while it buys back about $10 billion of stock this year.
Dividends took a well-covered 44% of free cash flow over the twelve months to Sept. 30, and 46% on analysts’ 2026 estimates. Free cash flow has topped dividends paid in every year since fiscal 2016:
AT&T (T): free cash flow vs. dividends paid, $ billions, fiscal 2016–2025 (TIKR)
Third-quarter revenue rose 5.3% to $32.3 billion, and management is guiding to free cash flow of $18 billion+ this year, rising to $21 billion+ in 2028.
The risk is SpaceX. SpaceX agreed on Oct. 8 to buy spectrum for a Starlink wireless carrier. On Oct. 23, Bloomberg reported it’s in talks for access to at least 80,000 US cell sites, and AT&T fell 8% that day. CEO John Stankey argues that “the most durable customer combination in our industry is a fiber-fed broadband customer with a great wireless service on top of it, bar none.”
ONEOK covers its check more than twice
ONEOK has the widest cushion of the three. In fiscal 2025 it made $9.25 a share of distributable cash flow against $4.12 of dividends, which is 2.25x coverage. Analysts’ 2026 estimates put it at 2.30x, up from 1.17x in fiscal 2020:
ONEOK (OKE): dividends per share vs. distributable cash flow per share, $ per share, fiscal 2016–2025 (TIKR)
The dividend grew more slowly than that cushion: 2.0% a year from fiscal 2020 to fiscal 2025, from $3.74 to $4.12. StockAnalysis counts 3 straight years of raises.
Third-quarter adjusted EBITDA rose 6% to $2.24 billion, and ONEOK raised its 2026 guidance for the third time this year, to $8.5 billion to $8.6 billion. It closed the $4.425 billion Brazos Permian acquisition on Oct. 6 and says the deal speeds up its ability to raise the dividend and buy back stock. The risk is the one every pipeline carries: its volumes depend on producers, and producers drill less when energy prices fall.
If Hormel halved its dividend
Hormel’s check is the one to test, since it’s the least covered of the three on its own measure. If Hormel halved its dividend, this retiree’s income would fall to $42,454.42 a year, or $3,537.87 a month. If it stopped paying, the income would fall to $33,678.84 a year, or $2,806.57 a month.
I don’t expect either. Management calls the dividend a priority, and free cash flow covered it over the twelve months to July. But a 5.27% yield on a 60-year raiser tells you the market has its doubts, and Brakebush adds debt while free cash flow is still climbing back from fiscal 2025.
Two sturdy checks and one to watch
Bottom line: ONEOK’s check is safe and growing, AT&T’s is safe but flat, and Hormel’s is stretched. For this retiree, that still adds up to $4,269.17 a month, most of it on firm footing. The thing I’ll watch is Hormel’s full-year report, its first under Ghingo. If free cash flow comes in comfortably above the dividend, I’d feel much better about that check.
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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 ment
Source: www.tikr.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
