We have maintained our Neutral recommendation on utility
). The company currently has a Zacks Rank #3 (Hold).
Why the Reiteration?
Despite missing the Zacks Consensus Estimate for earnings per
share and revenues, ONEOK Inc.'s higher natural gas volumes,
collected and processed and natural gas liquids (NGL) volumes
gathered in the Williston Basin enabled it to surpass the
It is evident from past record that ONEOK Inc. maintains a strong
financial position which enables it to pursue both organic and
inorganic growth. In addition, steady cash flow generation from
the company's operating segments gives ONEOK Inc. more investment
In 2013, the company intends to invest $3 billion, including an
allocation of $2.64 billion for its subsidiary
ONEOK Partners LP
). As ONEOK Partners acts as a primary growth vehicle for ONEOK
Inc., the company invariably deploys a major chunk of capital for
In Apr 2013, ONEOK Partners completed three important projects -
Bakken NGL pipeline, Stateline II plant and an ethane header
pipeline. We believe that continuous investment in the Bakken
Shale and its neighboring locations will play a crucial role in
meeting the ever increasing demand for fossil fuel. These
initiatives will likely improve ONEOK Inc.'s future results.
In addition, a solid financial position allows ONEOK Inc. to
maximize shareholder wealth through dividend payments at regular
intervals. The company paid $73.8 million as dividends during the
first three months of 2013. Further, ONEOK Inc. announced that it
will increase the quarterly dividend rate by 2 cents in Jul 2013
from the current rate of 36 cents per share, subject to its
However, stringent regulations and volatile commodity pricing
could weigh on the company's forthcoming performance.
Other Stocks to Consider
Other stocks in the industry that are worth considering now
Atmos Energy Corp.
New Jersey Resources Corp.
), both with a Zacks Rank #2 (Buy).
ATMOS ENERGY CP (ATO): Free Stock Analysis
NJ RESOURCES (NJR): Free Stock Analysis
ONEOK INC (OKE): Free Stock Analysis Report
ONEOK PARTNERS (OKS): Free Stock Analysis
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