NYSE:OKE

Stock Analysis Report

Executive Summary

ONEOK, Inc., together with its subsidiaries, engages in gathering, processing, storage, and transportation of natural gas in the United States.

Rewards

Trading at 49.8% below its fair value

Earnings are forecast to grow 21.24% per year

Earnings grew by 11% over the past year

Pays a reliable dividend of 17.86%

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 17.86% is not well covered by earnings or forecast to be in the next 3 years

Highly volatile share price over past 3 months



Snowflake Analysis

High growth potential, good value and pays a dividend.


Similar Companies

Share Price & News

How has ONEOK's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OKE's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.1%

OKE

5.9%

US Oil and Gas

7.2%

US Market


1 Year Return

-71.5%

OKE

-56.4%

US Oil and Gas

-10.4%

US Market

Return vs Industry: OKE underperformed the US Oil and Gas industry which returned -57.2% over the past year.

Return vs Market: OKE underperformed the US Market which returned -12.7% over the past year.


Shareholder returns

OKEIndustryMarket
7 Day-9.1%5.9%7.2%
30 Day-70.0%-35.6%-12.6%
90 Day-73.5%-51.6%-19.4%
1 Year-70.0%-71.5%-54.6%-56.4%-8.5%-10.4%
3 Year-58.2%-64.2%-51.8%-56.5%15.8%8.3%
5 Year-45.2%-58.6%-55.3%-62.2%35.8%21.0%

Price Volatility Vs. Market

How volatile is ONEOK's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ONEOK undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OKE ($20.94) is trading below our estimate of fair value ($41.71)

Significantly Below Fair Value: OKE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OKE is poor value based on its PE Ratio (6.8x) compared to the Oil and Gas industry average (6.7x).

PE vs Market: OKE is good value based on its PE Ratio (6.8x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: OKE is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: OKE is overvalued based on its PB Ratio (1.4x) compared to the US Oil and Gas industry average (0.5x).


Next Steps

Future Growth

How is ONEOK forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

21.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OKE's forecast earnings growth (21.2% per year) is above the savings rate (1.7%).

Earnings vs Market: OKE's earnings (21.2% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: OKE's revenue (10% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: OKE's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OKE's Return on Equity is forecast to be high in 3 years time (24.1%)


Next Steps

Past Performance

How has ONEOK performed over the past 5 years?

37.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OKE has high quality earnings.

Growing Profit Margin: OKE's current net profit margins (12.6%) are higher than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: OKE's earnings have grown significantly by 37.9% per year over the past 5 years.

Accelerating Growth: OKE's earnings growth over the past year (11%) is below its 5-year average (37.9% per year).

Earnings vs Industry: OKE earnings growth over the past year (11%) exceeded the Oil and Gas industry -11.4%.


Return on Equity

High ROE: Whilst OKE's Return on Equity (20.54%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is ONEOK's financial position?


Financial Position Analysis

Short Term Liabilities: OKE's short term assets ($1.5B) do not cover its short term liabilities ($2.0B).

Long Term Liabilities: OKE's short term assets ($1.5B) do not cover its long term liabilities ($13.6B).


Debt to Equity History and Analysis

Debt Level: OKE's debt to equity ratio (207.3%) is considered high.

Reducing Debt: OKE's debt to equity ratio has increased from 206.4% to 207.3% over the past 5 years.

Debt Coverage: OKE's debt is not well covered by operating cash flow (15.1%).

Interest Coverage: OKE's interest payments on its debt are well covered by EBIT (3.9x coverage).


Balance Sheet

Inventory Level: OKE has a high level of physical assets or inventory.

Debt Coverage by Assets: OKE's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is ONEOK's current dividend yield, its reliability and sustainability?

18.66%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OKE's dividend (17.86%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: OKE's dividend (17.86%) is in the top 25% of dividend payers in the US market (5.49%)


Stability and Growth of Payments

Stable Dividend: OKE's dividends per share have been stable in the past 10 years.

Growing Dividend: OKE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (116.7%), OKE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OKE's dividends in 3 years are not forecast to be well covered by earnings (99% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Terry Spencer (60yo)

6.17s

Tenure

US$7,099,869

Compensation

Mr. Terry K. Spencer has been the Chief Executive Officer and President of Oneok Inc. since January 31, 2014 and January 2012 respectively. Mr. Spencer served as the Chief Executive Officer and President o ...


CEO Compensation Analysis

Compensation vs Market: Terry's total compensation ($USD7.10M) is about average for companies of similar size in the US market ($USD7.36M).

Compensation vs Earnings: Terry's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Terry Spencer
President6.17yrsUS$7.10m0.15% $12.8m
Walter Hulse
CFO, Treasurer and Executive VP of Strategic Planning & Corporate Affairs2.83yrsUS$2.84m0.026% $2.2m
Kevin Burdick
Executive VP & COO2.83yrsUS$2.72m0.021% $1.7m
Robert Martinovich
Executive VP & Chief Administrative Officer5yrsUS$2.14m0.065% $5.4m
Sheridan Swords
Senior Vice President of Natural Gas Liquids7.17yrsUS$2.00m0.043% $3.6m
Mary Spears
VP & Chief Accounting Officer1yrno data0.0040% $334.6k
Andrew Ziola
Vice president of Investor Relations & Corporate Affairsno datano datano data
Stephen Allen
Senior VP2.67yrsno data0.014% $1.2m
Charles Kelley
Senior Vice President of Natural Gas2.17yrsno data0.024% $1.9m
S. Grimshaw
VP, Associate General Counsel & Corporate Secretary11.83yrsno datano data

2.8yrs

Average Tenure

55yo

Average Age

Experienced Management: OKE's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Terry Spencer
President6.17yrsUS$7.10m0.15% $12.8m
Pattye Moore
Independent Director18.17yrsUS$225.65k0.00082% $67.9k
Eduardo Rodriguez
Independent Director15.83yrsUS$210.50k0.0041% $341.3k
Julie Edwards
Independent Director12.67yrsUS$230.71k0.012% $1.0m
Steven Malcolm
Independent Director8.17yrsUS$223.00k0.0056% $460.5k
Gary Parker
Independent Director29.17yrsUS$210.50k0.010% $839.1k
Jimmy Mogg
Lead Independent Director7.17yrsUS$215.50k0.00048% $39.8k
John Gibson
Non-Executive Chairman of the Board8.83yrsUS$382.06k0.23% $19.3m
Randall Larson
Independent Director4.25yrsUS$230.50k0.0040% $327.2k
Brian Derksen
Independent Director4.25yrsUS$210.50k0.0033% $276.6k

8.5yrs

Average Tenure

65yo

Average Age

Experienced Board: OKE's board of directors are considered experienced (8.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: OKE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ONEOK, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ONEOK, Inc.
  • Ticker: OKE
  • Exchange: NYSE
  • Founded: 1906
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: US$8.283b
  • Shares outstanding: 413.32m
  • Website: https://www.oneok.com

Number of Employees


Location

  • ONEOK, Inc.
  • 100 West Fifth Street
  • Tulsa
  • Oklahoma
  • 74103
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OKENYSE (New York Stock Exchange)YesCommon StockUSUSDMar 1964
ONKDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1964
0KCILSE (London Stock Exchange)YesCommon StockGBUSDMar 1964
O1KE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

ONEOK, Inc., together with its subsidiaries, engages in gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions. It also gathers, treats, fractionates, and transports natural gas liquids (NGL), as well as stores, markets, and distributes NGL products. The company owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Missouri, Nebraska, Iowa, and Illinois; and NGL distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois, and Indiana, as well as owns and operates truck- and rail-loading, and -unloading facilities that interconnect with its NGL fractionation and pipeline assets. In addition, it operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities. Further, the company owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space to others. It serves integrated and independent exploration and production companies; NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; propane distributors; ethanol producers; and petrochemical, refining, and NGL marketing companies, as well as natural gas distribution companies, electric-generation facilities, industrial companies, municipalities, producers, processors, and marketing companies. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 00:42
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.