On Dec 30, 2013, the shares of
) climbed to its 52-week high of $61.49 primarily on the back of
strong earnings guidance for 2014, chances of an increase in the
2014 annual dividend, a systematic organic growth strategy and a
positive impact from the termination of the energy services
On Dec 2, 2013, ONEOK provided financial guidance. The company
expects its 2014 net income to be $285 million, up 9.5% from $260
million guided for 2013. The company's performance in 2014 may
primarily drive by strong contribution from its subsidiary,
ONEOK Partners, L.P.
). ONEOK Partners' performance is expected to improve primarily
owing to an increase in natural gas gathering and processing
volumes, and higher natural gas liquids ("NGL") gathering volumes
as a result of the completion of several projects.
In addition, the company plans to increase the 2014 annual
dividend by 53% to $2.33 per share from $1.52 per share in 2013,
subject to the board's sanction. ONEOK also expects to increase
the average annual dividend in the range of 20% - 25% between
2013 and 2016. The company's practice of raising dividends at
regular intervals will benefit the stock as it attracts investor
In 2014, ONEOK plans to invest $2,268 million and allocate the
majority to several projects under ONEOK Partners' portfolio.
Currently, the partnership is in the middle of several important
projects and plans to begin few projects in the near term,
including a venture in Williston Basin. These projects will
enable ONEOK to serve more customers in the future.
ONEOK plans to terminate its natural gas distribution business.
Post transaction, the distribution business will be named as ONE
Gas, Inc. We believe this initiative will enable the company to
assign resources as per its strategic preferences.
We expect ONEOK's well-diversified asset base, systematic capital
investment plan, timely completion of projects and efforts
towards maximization of shareholder wealth to likely boost its
performance going forward.
ONEOK Inc. currently has a Zacks Rank #3 (Hold). Some
better-ranked stocks in the sector include
AGL Resources Inc.
Resources Group Inc.
), each holds a Zacks Rank #2 (Buy).
AGL RESOURCES (GAS): Free Stock Analysis
MDU RESOURCES (MDU): Free Stock Analysis
ONEOK INC (OKE): Free Stock Analysis Report
ONEOK PARTNERS (OKS): Free Stock Analysis
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