The Tulsa, OK-based master limited partnership, which is the sole general partner of ONEOK Partners (OKS), engages in the gathering, processing, storage and transportation of natural gas.
The company will have no debt maturities until 2022 and its dividend is expected to remain flat next year.
Natural gas gathered is expected to average 2.2 trillion to 2.3 trillion British thermal units per day next year, compared with the average 1.9 trillion Btu per day for the first nine months of 2015.
Natural gas processed will average between 1.9 trillion to 2 trillion Btu per day in 2016, up from an average 1.6 trillion Btu for the first three quarters of 2015.
ONEOK Partners is expected to see an increase in earnings next year compared with 2015. Analysts have estimated for earnings of 51 cents per share for 2015, down from 67 cents per share for 2014.
So far today, 7.71 million shares of ONEOK have been traded, compared with its average daily volume of 2.87 million shares.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ONEOK INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 27.4% when compared to the same quarter one year prior, rising from $64.46 million to $82.16 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ONEOK INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- OKE, with its decline in revenue, slightly underperformed the industry average of 36.9%. Since the same quarter one year prior, revenues fell by 39.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- OKE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.19%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The debt-to-equity ratio is very high at 21.04 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: OKE