On Jun 27, 2014, the units of
ONEOK Partners, L.P.
) climbed to a 52-week high of $57.90. The unit price was finally
closed at $57.62, up marginally from the previous day's closing of
$57.59. We believe that the partnership's disciplined capital
spending activities backed by strong cash generating capacity, a
stable liquidity position and payment of regular cash distribution
have boosted the unit price.
We view ONEOK Partners as an organization with asset-base in
different mineral-rich regions. The partnership's systematic
investments in infrastructure ventures at the Bakken Shale, Powder
River Basin and several other places are appreciable.
Recently, ONEOK Partners invested around $1 billion for the
completion of three natural gas gathering and processing and
natural gas liquids projects. In first-quarter 2014, the
partnership invested around $0.4 billion and plans to spend a total
of $6 - $6.4 billion between 2010 and 2016 for infrastructure
projects. A steady investment in several organic projects will
enable ONEOK Partners to boost its service capacity, thereby
meeting increasing customer demand.
ONEOK Partners continues to show its efficiency in terms of
improving cash inflow through operating activities. In
first-quarter 2014, the partnership's operating cash flow jumped
155.6% to $0.46 billion from the prior-year comparable figure.
In addition, ONEOK Partners maintained a stable liquidity position.
As of Mar 31, 2014, the partnership had available credit of around
$1.6 billion under the credit agreement and cash and cash
equivalents of nearly $0.12 billion.
ONEOK Partners' steady cash generating capacity and favorable
liquidity profile enable it to meet funding requirements of several
In addition to pursuing systemic capital investment initiatives,
ONEOK Partners is paying cash distribution at regular intervals. In
Apr 2014, the board of directors of the partnership increased the
quarterly cash distribution rate by 2.1% to 74.5 cents per unit
from the previous payout.
ONEOK Partners currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the sector include
Delek Logistics Partners, LP
Energy Transfer Partners, L.P.
Magellan Midstream Partners LP
). All the stocks carry a Zacks Rank #1 (Strong Buy).
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