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

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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.

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