ONEOK Inc. Upgraded to Neutral - Analyst Blog

By
A A A

On Mar 8, 2013, we upgraded our recommendation on ONEOK Inc. ( OKE ) 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).

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 operating costs.

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 region.

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 investment options.

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. ( LG ) having a Zacks Rank #1 (Strong Buy), and Atmos Energy Corporation ( ATO ) and Sempra Energy ( SRE ) with a Zacks Rank #2 (Buy).



ATMOS ENERGY CP (ATO): Free Stock Analysis Report

LACLEDE GRP INC (LG): Free Stock Analysis Report

ONEOK INC (OKE): Free Stock Analysis Report

SEMPRA ENERGY (SRE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATO , LG , NGL , OKE , SRE

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

100%
0%
100%
100%
100%

Most Active by Volume

91,252,153
  • $13.78 ▼ 4.31%
68,133,496
  • $12.93 ▲ 6.77%
57,268,074
  • $46.13 ▲ 2.47%
43,432,023
  • $105.22 ▲ 0.37%
40,880,685
  • $13.46 ▲ 8.90%
40,712,405
  • $98.62 ▲ 0.82%
39,776,976
  • $16.72 ▲ 0.72%
34,688,871
  • $11.16 ▲ 3.05%
As of 10/24/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com