Back to top

Here's Why You Should Add ONEOK (OKE) to Your Portfolio

Read MoreHide Full Article

Earnings estimates for ONEOK, Inc. (OKE - Free Report) have been revised upward over the past 60 days, reflecting analyst’s optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings inched up by 2% and 0.7% to $2.63 and $2.80 per share respectively.

ONEOK, based in Tulsa, OK, is an energy company that is engaged in natural gas and natural gas liquids (NGL) businesses. The company delivered a positive earnings surprise in the last two quarters, the average being 2.6%.

Let’s focus on the factors that make ONEOK a profitable bet for greater returns.

VGM Score: The stock has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Price Performance: The company’s shares have rallied 39.8% in a year’s time compared with the industry’s gain of 12.6%. The stock carries a Zacks Rank #2 (Buy).



Capex Plan: Since June 2017, the company announced nearly $4.2 billion of organic capital-growth projects to support increasing production across ONEOK's operating footprint. Capital expenditure of ONEOK for 2018 is projected in the range of $2,090-$2,480 million, with the majority directed toward growth projects.

Growth Projections: The Zacks Consensus Estimate for current-year earnings is pegged at $2.63 per share, reflecting year-over-year growth of 49.4%.

For 2019, the consensus estimate for EPS is pegged at $2.80, depicting a 6.3% year-over-year rise.

Other Stocks to Consider

A few other top-ranked stocks from the same space are Atmos Energy Corporation (ATO - Free Report) ,Chesapeake Utilities Corporation (CPK - Free Report) and Northwest Natural Gas Company (NWN - Free Report) , each holding a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atmos Energy delivered an average four-quarter positive surprise of 8.76%. The Zacks Consensus Estimate for 2018 earnings has inched up 0.5% to $3.99in the last 60 days.

Chesapeake Utilities pulled off an average four-quarter positive surprise of 0.29%. The Zacks Consensus Estimate for 2018 earnings has moved up 1.5% in the last 60 days to $3.49.

Northwest Natural Gas delivered an average four-quarter positive surprise of 20%. The Zacks Consensus Estimate for 2018 earnings has moved up by a penny to $2.23 in the last 60 days.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend>>

More from Zacks Analyst Blog

You May Like

Published in