On Oct 10, 2013, we have reiterated our Neutral recommendation
ONEOK Partners LP
). The partnership currently has a Zacks Rank #3 (Hold).
DELEK LOGISTICS (DKL): Free Stock Analysis
ENERGY TRAN PTR (ETP): Free Stock Analysis
KINDER MORG ENG (KMP): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
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Why the Reiteration?
ONEOK Partners has a geographically diversified asset base with
its gathering and processing businesses operating in different
basins. It is evident from the decline in cash balance and a rise
in capital expenditure figures that the partnership continues to
invest substantially for new infrastructures while improving the
ONEOK Partners plans to complete several important projects,
including the MB-2 natural gas liquids (NGL) fractionator at Mont
Belvieu and the Sterling III Pipeline by 2013. On the inorganic
front, the partnership intends to acquire a natural gas
processing facility, the Sage Creek plant in the Powder River
Basin. We believe successful completion of internal projects and
strong acquisition strategy will help the partnership to serve
more customers, thereby improving revenues going forward.
On the flip side, ONEOK Partners receives a significant part of
its revenues as payment for gathering and processing, and
transportation and storage services. A decline in prices of
natural gas, crude oil and NGL, may result in reduced payments
for these services, thus significantly impacting future cash
flow. In the previous quarter, the partnership's earnings
decreased year over year primarily due to a decline in NGL
optimization margins and narrower NGL price differentials.
ONEOK Partners' operations are subject to extensive federal,
state and local rules and regulations governing the discharge of
materials and protection of the environment. If, ONEOK Partners
violates the laws or fails to meet the standard implemented by
the aforesaid organizations, the partnership might face several
consequences including penalties, civil fines and injunctions.
Other Stocks to Consider
Stocks from the industry that are presently performing well
Delek Logistics Partners, LP
Energy Transfer Partners, L.P.
Kinder Morgan Energy Partners, L.P.
), all with a Zacks Rank #2 (Buy).