Stock of the Day

January 25, 2023

ONEOK (OKE)

$95.48
-$0.53 (-0.6%)
Market Cap: $60.19B

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 reported earnings per share that exceeded analyst expectations, indicating strong financial performance and potential for future growth.
  • The company has set its FY 2026 guidance at a solid EPS, suggesting confidence in its ongoing operations and profitability.
  • ONEOK, Inc. offers a competitive annualized dividend yield of approximately 4.6%, which can provide a steady income stream for investors.
  • Recent upgrades from analysts, including a "strong-buy" rating, reflect positive sentiment and potential for stock price appreciation.
  • The current stock price is around $91.94, which is supported by a consensus rating of "Moderate Buy" from analysts, indicating favorable market conditions.

ONEOK Bear Case

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

  • The company's payout ratio is currently at 73.79%, which may raise concerns about sustainability of its dividend payments in the long term.
  • Some analysts have downgraded their price targets for ONEOK, Inc., indicating potential volatility and uncertainty in future stock performance.
  • Despite strong earnings, the net margin of 9.29% suggests that there may be challenges in maintaining profitability amidst market fluctuations.
  • Market conditions for midstream energy companies can be unpredictable, which may impact ONEOK, Inc.'s operational efficiency and growth prospects.
  • With a significant portion of analysts rating the stock as "Hold," there may be limited upside potential in the near term, suggesting caution for new investors.
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