Diversified energy company
) is expected to deliver strong results between 2012 and 2014 on
the back of solid performances from its general partner
ONEOK projects that its net income will improve by 18% annually
between 2012 and 2014. During this period the company has planned
to increase its dividend payment by 40%, which includes a projected
dividend increase of 5 cents per share on a pre-split basis in July
2012, subject to ONEOK board approval.
The positive projection is attributed to natural gas and natural
gas liquids volume growth at ONEOK Partners. This would be brought
about by planned investments of $5 billion made in growth projects
which are expected to come online by 2015.
The first quarter results of the company fell short of our
expectation primarily due to a steep decline in natural gas prices
and a warmer winter in its service territories.
Despite the weak showing in the first quarter, the company
maintained its net income guidance for 2012 in the range of $360
million to $410 million, mainly due to the strength at ONEOK
Partners as displayed during the quarter.
The Zacks Consensus Estimates for the second quarter and fiscal
2012 are currently at 69 cents and $3.58, respectively.
We believe ONEOK's decision to split the stock, effective from
June 1, 2012, and a bullish projection for the next couple years
offer investors a solid investment thesis. Potentially higher
returns at a cheaper price will likely draw more investors towards
Based in Tulsa, Oklahoma, ONEOK Inc. is a diversified energy
company, operating as a natural gas distributor primarily in the
United States. The company presently retains a Zacks #3 Rank, which
translates into a short-term Hold rating.
ONEOK INC (OKE): Free Stock Analysis Report
ONEOK PARTNERS (OKS): Free Stock Analysis
To read this article on Zacks.com click here.