Summary
ONEOK: Deleveraging, Declining CapEx, And A Clear Path To Rerating
ONEOK is a Buy, with depressed valuations and a clear path to deleveraging and declining capital intensity supporting a compelling total return thesis. OKE's solid dividend, covered at ~77% of free cash flow, provides downside protection as risk perception normalizes and cash flows strengthen. Management targets a ~3.5x leverage ratio by end-2026, requiring modest EBITDA growth and capex normalization, with operational leverage from recent project completions.
ONEOK: High Yield And Firing Up Buybacks, A Winning Combination For Income Investors
ONEOK trades below historical valuation at 9.17x forward EV/EBITDA, with fair value estimated at $85 per share and further upside potential. OKE's CapEx is set to trend down, while dividend growth (3%-4% annually) and a $2B buyback authorization enhance total return prospects. Risks include oil segment volatility and refinancing needs, but leverage is expected to decline to 3.5x by end of 2026.
ONEOK: Buying Aggressive Consolidation Amid AI Demand
ONEOK continues the integration of acquired assets, the results of which will determine the company's future performance. OKE's organic growth projects and export terminal expansion position it to capture U.S. LNG export growth and deliver up to $450M in annual synergies. The article analyzes the economic market conjuncture, which helps identify growth drivers.
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Oneok Inc. Profile
| Oil, Gas & Consumable Fuels Industry | Energy Sector | Pierce H. Norton II CEO | NYSE Exchange | 682680103 CUSIP |
| US Country | 5,177 Employees | 3 Nov 2025 Last Dividend | 3 Feb 2014 Last Split | 1 Jul 1985 IPO Date |
Overview
ONEOK, Inc., founded in 1906 and based in Tulsa, Oklahoma, stands as a significant player in the United States' energy sector, focusing on the gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL). The company operates through a diverse portfolio of assets, including natural gas gathering pipelines, processing plants, and NGL distribution pipelines across multiple states such as Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado. ONEOK's operations span across four primary segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude. Through its extensive network and varied services, ONEOK caters to a broad spectrum of clients, ranging from exploration and production companies to utilities and industrial customers, showcasing its integral role in the midstream sector of the energy industry.
Products and Services
- Natural Gas Gathering and Processing:
- Natural Gas Liquids (NGL):
- Natural Gas Pipelines:
- Refined Products and Crude:
- Miscellaneous Services:
ONEOK operates a vast network of natural gas gathering pipelines and processing plants primarily in the Mid-Continent and Rocky Mountain regions. This infrastructure supports the cleaning, treating, and processing of raw natural gas to remove impurities and separate NGLs, making it suitable for commercial use and further fractionation.
The company's involvement in NGLs encompasses gathering, fractionation, storage, and distribution of NGL products. ONEOK owns extensive NGL infrastructure, including pipelines and fractionation facilities that allow for the separation of NGLs into their constituent products such as ethane, propane, butanes, and natural gasoline. These products are crucial for various applications in the petrochemical and heating industries.
ONEOK's pipeline network includes regulated interstate and intrastate natural gas transmission pipelines. These pipelines play a crucial role in the efficient and safe transport of natural gas from production sites to end-users, including residential, commercial, and industrial customers, ensuring a reliable supply of energy.
This segment of ONEOK's operations focuses on the transportation, storage, and distribution of refined petroleum products like unleaded gasoline and diesel, as well as crude oil. The company manages assets such as terminals and storage facilities, along with truck- and rail-loading and -unloading facilities, which are vital for the movement of energy resources across different regions.
Besides its core operations, ONEOK engages in various additional services that complement its main business lines. These include owning and operating a parking garage in downtown Tulsa, leasing office space, and engaging in commodity-related activities such as liquids blending and marketing. This diversified approach allows ONEOK to leverage its infrastructure and expertise across different areas, providing added value to its stakeholders.
