On Mar 8, 2013, we upgraded our recommendation on
) to Neutral from Underperform. In the last reported quarter, the
company posted positive earnings surprise of 17.78%. ONEOK Inc.
currently has a Zacks Rank #3 (Hold).
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Reasons for Upgrade
The revision in recommendation was primarily driven by strong
results in both the fourth-quarter and the full year. The
improvement in performance was primarily attributable to higher
natural gas and natural gas liquids (NGL) volumes, and lower
We are impressed with ONEOK Inc.'s steady progress in its
Stateline II natural gas processing plant and Bakken NGL pipeline
projects. These projects will enable the company to cope with
increased natural gas and NGL production in the Bakken Shale
ONEOK Inc. repurchased shares worth $150 million in 2012 under
its $750 million 3-year share repurchase program. Till date, the
company has bought back shares worth $450 million and can
repurchase shares, worth $300 million, in 2013. We believe this
effort will further increase shareholder returns.
ONEOK Inc. maintains a strong financial position, and is equipped
with structured and flexible growth through either an organic or
inorganic route. Steady cash flow generation from the company's
operating segments allows it flexibility along with more
The Zacks Consensus Estimate for first-quarter 2013 currently
stands at 59 cents per share, up 13.79% y/y, after considering
the above-mentioned strong positives.
Other Stocks to Consider
Besides ONEOK Inc., other stocks in the industry that are
currently performing well include
The Laclede Group Inc.
) having a Zacks Rank #1 (Strong Buy), and
Atmos Energy Corporation
) with a Zacks Rank #2 (Buy).