Stock of the Day

January 25, 2023

ONEOK (OKE)

$93.30
+$2.65 (+2.9%)
Market Cap: $58.79B

About ONEOK

ONEOK, Inc. engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions; and provides midstream services to producers of NGLs. It also owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Kansas, Nebraska, Iowa, and Illinois; NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois, and Indiana; transports refined petroleum products, including unleaded gasoline and diesel; and owns and operates truck- and rail-loading, and -unloading facilities connected to NGL fractionation, storage, and pipeline assets. In addition, the company transports and stores natural gas through regulated interstate and intrastate natural gas transmission pipelines, and natural gas storage facilities. Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space and rail cars. Additionally, the company transports, stores, and distributes refined products, NGLs, and crude oil, as well as conducts commodity-related activities, including liquids blending and marketing activities. It serves integrated and independent exploration and production companies; other NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; utilities; industrial companies; natural gasoline distributors; propane distributors; municipalities; ethanol producers; petrochemical, refining, and marketing companies; and heating fuel users, refineries, and exporters. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.

ONEOK Bull Case

Here are some ways that investors could benefit from investing in ONEOK, Inc.:

  • ONEOK, Inc. recently completed the acquisition of Brazos Midstream's Permian Midland Basin assets for approximately $4.425 billion, a move that establishes one of the largest integrated natural gas gathering and processing platforms in the region and significantly expands the company's footprint in a rapidly growing resource play.
  • The company declared a quarterly dividend of $1.07 per share on October 14, 2026, which remains unchanged from the previous quarter and results in an attractive annualized dividend yield of 4.65% based on the current stock price of $91.94.
  • ONEOK, Inc. demonstrated strong financial performance in its most recent quarterly report, beating analysts' consensus estimates with earnings per share of $1.53 compared to the expected $1.46, while also reporting revenue of $12.05 billion against a consensus estimate of $8.95 billion.
  • With a beta of 0.82, the stock exhibits lower volatility than the broader market, offering a defensive characteristic that may appeal to investors seeking stability in their energy infrastructure holdings.
  • The company maintains a solid valuation profile with a P/E ratio of 15.85, which is competitive within the sector, and institutional investors continue to show confidence by holding 69.13% of the company's stock.

ONEOK Bear Case

Investors should be bearish about investing in ONEOK, Inc. for these reasons:

  • The stock is currently trading at $91.94, which is below the average analyst target price of $96.24, and the consensus rating from twenty ratings firms is "Hold," suggesting limited near-term upside potential compared to other opportunities.
  • ONEOK, Inc. carries a high debt-to-equity ratio of 1.34, indicating a significant level of leverage that could pressure the company's financial flexibility and increase risk during periods of economic uncertainty or rising interest rates.
  • The company's liquidity position is somewhat constrained, with a current ratio of 0.74 and a quick ratio of 0.59, both of which are below 1.0, suggesting that short-term liabilities exceed current assets and quick assets, respectively.
  • Short interest in the stock has been increasing, with shares shorted rising to 24,399,286 as of the September 30, 2026 record date, representing a short percentage of float of 3.88%, which may indicate bearish sentiment among some market participants.
  • Despite recent earnings beats, the company's payout ratio is presently 73.79%, which is relatively high and may limit the amount of free cash flow available for reinvestment in growth projects or debt reduction.
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