ONEOK (OKE) vs. The Competition Critical Contrast

ONEOK (NYSE: OKE) is one of 53 public companies in the “Oil & Gas Transportation Services” industry, but how does it contrast to its competitors? We will compare ONEOK to related companies based on the strength of its risk, earnings, profitability, analyst recommendations, institutional ownership, dividends and valuation.

Insider and Institutional Ownership

51.3% of ONEOK shares are held by institutional investors. Comparatively, 57.2% of shares of all “Oil & Gas Transportation Services” companies are held by institutional investors. 1.0% of ONEOK shares are held by insiders. Comparatively, 9.3% of shares of all “Oil & Gas Transportation Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

ONEOK has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, ONEOK’s competitors have a beta of 1.39, indicating that their average stock price is 39% more volatile than the S&P 500.

Dividends

ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.3%. ONEOK pays out 186.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil & Gas Transportation Services” companies pay a dividend yield of 6.4% and pay out 172.0% of their earnings in the form of a dividend. ONEOK has raised its dividend for 14 consecutive years. ONEOK lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a summary of current ratings for ONEOK and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ONEOK 0 8 5 0 2.38
ONEOK Competitors 269 1731 2326 83 2.50

ONEOK presently has a consensus target price of $57.58, suggesting a potential upside of 2.79%. As a group, “Oil & Gas Transportation Services” companies have a potential upside of 17.99%. Given ONEOK’s competitors stronger consensus rating and higher possible upside, analysts clearly believe ONEOK has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares ONEOK and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
ONEOK $10.49 billion $1.68 billion 35.01
ONEOK Competitors $5.66 billion $1.31 billion 38.45

ONEOK has higher revenue and earnings than its competitors. ONEOK is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares ONEOK and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ONEOK 3.26% 8.62% 2.11%
ONEOK Competitors 17.47% 14.29% 5.55%

Summary

ONEOK competitors beat ONEOK on 13 of the 15 factors compared.

About ONEOK

ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.

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