Tulsa, Oklahoma-based ONEOK, Inc. (OKE) is a prominent energy company with a market cap of $52.7 billion. The company focuses on the gathering, processing, and transportation of natural gas and natural gas liquids across multiple segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and ONEOK fits this criterion perfectly, exceeding the mark. ONEOK stands out in the market for its strategic integration of natural gas and natural gas liquids infrastructure, including its extensive network of pipelines, storage, and processing facilities, which enables it to effectively manage and optimize energy flows across multiple regions.
However, the natural gas company is down 2.7% from its 52-week high of $93, achieved on Sep. 4. Shares of OKE are 12.9% up over the past three months, outpacing the First Trust Nasdaq Oil & Gas ETF’s (FTXN) 6.8% loss over the same time frame.
Longer term, OKE stock has risen 28.9% on a YTD basis, outperforming FTXN's marginal gain. Moreover, shares of ONEOK have soared 36.5% over the past 52 weeks, compared to FTXN's 8.6% decrease over the same time frame.
To confirm the bullish price trend, OKE has been trading above its 50-day and 200-day moving average since last year.
ONEOK has outperformed due to its extensive pipeline network, robust fee-based revenue model, strategic acquisitions like Magellan, and strong financial performance driven by increased natural gas and NGL demand.
Moreover, the stock rose 4.7% following its Q2 earnings release on Aug. 5 due to a notable increase in natural gas and NGL volumes, particularly in the Rocky Mountain region, which drove a significant rise in profits despite lower commodity prices. The company's strong financial performance, highlighted by a doubling of net income of $780 million and revenue of $4.9 billion, further enhanced investor confidence.
In comparison, rival EnLink Midstream, LLC (ENLC) has underperformed OKE. ENB shares have risen 14.7% over the past 52 weeks and are up 19.3% on a YTD basis.
Despite OKE’s strong price action, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from the 17 analysts in coverage, and as of writing, it is trading slightly below the mean price target of $91.94.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
