ONEOK Partners Hits 52-Week High - Analyst Blog


On Jun 27, 2014, the units of ONEOK Partners, L.P. ( OKS ) 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 ventures.

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 ( DKL ), Energy Transfer Partners, L.P. ( ETP ) and Magellan Midstream Partners LP ( MMP ). All the stocks carry a Zacks Rank #1 (Strong Buy).

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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: MMP , OKS , ETP , DKL

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