On Sep 30, we reiterated our Neutral recommendation on
), the diversified energy company. ONEOK currently has a Zacks
Rank #3 (Hold).
Why the Reiteration?
ONEOK's second-quarter 2013 results surpassed the Zacks Consensus
Estimate as well as the year-ago number. The strong performance
was primarily driven by an increase in natural gas liquids (NGL)
volumes gathered and natural gas volumes gathered and processed
following the completion of several projects. In addition, colder
weather in its services territories had a favorable impact on
ONEOK has long-term plans to develop its existing operations,
which are likely to pave the way for future growth. The company
is in the middle of several important projects and we believe
consistent capital investment will help in their timely
completions. The company has already decided to invest $4.7
billion to $5.2 billion under its capital spending program from
2010 to 2015.
ONEOK has to abide by various federal, state and local
regulations, as well as extensive environmental regulations. Any
changes to and modifications of existing regulations could impact
the cost structure of the company. The company's profitability
largely depends on its ability to drive rate base growth in its
In addition, ONEOK's growth largely comes from its ability to
acquire assets and successfully integrate them. An inability to
either find the right assets at reasonable prices or integrate
them into its business would impede the company's growth
prospects or lead to cost over-runs.
Other Stocks to Consider
Other well-placed energy companies at the moment are
AGL Resources Inc.
The Laclede Group, Inc.
Atmos Energy Corporation
). AGL Resources Inc. and The Laclede Group hold a Zacks Rank #1
(Strong Buy) while Atmos Energy currently has a Zacks Rank #2
ATMOS ENERGY CP (ATO): Free Stock Analysis
AGL RESOURCES (GAS): Free Stock Analysis
LACLEDE GRP INC (LG): Free Stock Analysis
ONEOK INC (OKE): Free Stock Analysis Report
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