Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- ONEOK (NYSE: OKE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, deteriorating net income and poor profit margins.
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- 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.
- Net operating cash flow has slightly increased to $490.38 million or 4.00% when compared to the same quarter last year. Despite an increase in cash flow, ONEOK INC's cash flow growth rate is still lower than the industry average growth rate of 16.59%.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 16.9% when compared to the same quarter one year ago, dropping from $112.52 million to $93.52 million.
- The debt-to-equity ratio is very high at 12.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, OKE has a quick ratio of 0.58, this demonstrates the lack of ability of the company to cover short-term liquidity needs.