We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ONEOK Gains Momentum Through Acquisitions and Strategic Spending
Read MoreHide Full Article
Key Takeaways
ONEOK benefits from rising fee-based earnings and targeted capital spending across core segments.
In 2025, OKE expects 90% of its revenue from fees and $2.8B-$3.2B in capital investments.
OKE expanded its footprint with acquisitions of EnLink Midstream and full control of Delaware G
ONEOK Inc. (OKE - Free Report) continues to reap the rewards of rising fee-based earnings and systematic capital investments. The company's ongoing expansion efforts and pipeline additions are strategically aimed at reinforcing its foothold in key high-production regions. OKE's inorganic growth efforts play a vital role in broadening its operational footprint.
However, this Zacks Rank #3 (Hold) company encounters headwinds due to intense competition in its pipeline business.
Growth Catalysts for OKE
ONEOK is well-positioned to benefit from long-term fee-based commitments spanning all three of its core segments: Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines and Refined Products and Crude. In 2024, more than 88% of its earnings were fee-based. More than 90% of the company’s 2025 revenues are projected to come from fees. Over the past five years, natural gas liquid volumes from the Rocky Mountain region have surged, with an annual growth rate exceeding 20%, while natural gas processing volumes have grown at a steady 10% annual rate.
ONEOK remains committed to investing in organic growth initiatives aimed at deepening its presence in current operating areas and broadening its service offerings to crude oil and natural gas producers. The company projects its 2025 capital expenditures to fall within the range of $2.8-$3.2 billion.
The company is expanding its footprint through strategic inorganic initiatives. In January 2025, ONEOK finalized its acquisition of EnLink Midstream, LLC, strengthening its integrated midstream business and delivering added value to all stakeholders. In June 2025, ONEOK acquired the remaining 49.9% stake in Delaware G&P LLC for $940 million. These valuable acquisitions are anticipated to generate substantial cost efficiencies and synergies, contributing meaningfully to the company’s profitability.
OKE’s Hurdles
ONEOK does not hold full ownership of the land where its pipelines are situated, exposing it to potential increases in land-use costs. The inability to renew existing land rights or secure new ones for pipeline installation could adversely affect the company’s operational efficiency and overall profitability.
The natural gas and natural gas liquids pipeline industries are expected to remain highly competitive. Aside from established pipeline operators, the midstream space has witnessed a surge in energy companies creating master limited partnerships to enter pipeline services. The partnership's assets are well spread out, but its ability to withstand competitive forces will largely hinge on the efficiency, reliability and overall quality of its service offerings.
OKE Stock Price Movement
In the past month, OKE shares have dropped 1% compared with the industry’s decline of 0.2%.
DKL’s long-term (three to five years) earnings growth rate is 11.3%. The Zacks Consensus Estimate for its 2025 revenues stands at $1 billion, which indicates a year-over-year rise of 6.5%.
KRP’s long-term earnings growth rate is 3.7%. The Zacks Consensus Estimate for its 2025 revenues stands at $336.6 million, which calls for a year-over-year jump of 8.8%.
The Zacks Consensus Estimate for OII’s 2025 revenues is pegged at $2.74 billion, which suggests a year-over-year rally of 3.1%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $1.79, which indicates a year-over-year jump of 57%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ONEOK Gains Momentum Through Acquisitions and Strategic Spending
Key Takeaways
ONEOK Inc. (OKE - Free Report) continues to reap the rewards of rising fee-based earnings and systematic capital investments. The company's ongoing expansion efforts and pipeline additions are strategically aimed at reinforcing its foothold in key high-production regions. OKE's inorganic growth efforts play a vital role in broadening its operational footprint.
However, this Zacks Rank #3 (Hold) company encounters headwinds due to intense competition in its pipeline business.
Growth Catalysts for OKE
ONEOK is well-positioned to benefit from long-term fee-based commitments spanning all three of its core segments: Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines and Refined Products and Crude. In 2024, more than 88% of its earnings were fee-based. More than 90% of the company’s 2025 revenues are projected to come from fees. Over the past five years, natural gas liquid volumes from the Rocky Mountain region have surged, with an annual growth rate exceeding 20%, while natural gas processing volumes have grown at a steady 10% annual rate.
ONEOK remains committed to investing in organic growth initiatives aimed at deepening its presence in current operating areas and broadening its service offerings to crude oil and natural gas producers. The company projects its 2025 capital expenditures to fall within the range of $2.8-$3.2 billion.
The company is expanding its footprint through strategic inorganic initiatives. In January 2025, ONEOK finalized its acquisition of EnLink Midstream, LLC, strengthening its integrated midstream business and delivering added value to all stakeholders. In June 2025, ONEOK acquired the remaining 49.9% stake in Delaware G&P LLC for $940 million. These valuable acquisitions are anticipated to generate substantial cost efficiencies and synergies, contributing meaningfully to the company’s profitability.
OKE’s Hurdles
ONEOK does not hold full ownership of the land where its pipelines are situated, exposing it to potential increases in land-use costs. The inability to renew existing land rights or secure new ones for pipeline installation could adversely affect the company’s operational efficiency and overall profitability.
The natural gas and natural gas liquids pipeline industries are expected to remain highly competitive. Aside from established pipeline operators, the midstream space has witnessed a surge in energy companies creating master limited partnerships to enter pipeline services. The partnership's assets are well spread out, but its ability to withstand competitive forces will largely hinge on the efficiency, reliability and overall quality of its service offerings.
OKE Stock Price Movement
In the past month, OKE shares have dropped 1% compared with the industry’s decline of 0.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same sector are Delek Logistics Partners (DKL - Free Report) , Kimbell Royalty Partners (KRP - Free Report) and Oceaneering International (OII - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DKL’s long-term (three to five years) earnings growth rate is 11.3%. The Zacks Consensus Estimate for its 2025 revenues stands at $1 billion, which indicates a year-over-year rise of 6.5%.
KRP’s long-term earnings growth rate is 3.7%. The Zacks Consensus Estimate for its 2025 revenues stands at $336.6 million, which calls for a year-over-year jump of 8.8%.
The Zacks Consensus Estimate for OII’s 2025 revenues is pegged at $2.74 billion, which suggests a year-over-year rally of 3.1%. The Zacks Consensus Estimate for its 2025 earnings per share stands at $1.79, which indicates a year-over-year jump of 57%.