Seaport Global Securities Upgrades ONEOK Inc to Buy Rating, Sets Price Target at $76
Seaport Global Securities Raises Rating and Sets Price Target for ONEOK
On Thursday, Seaport Global Securities upgraded its rating on ONEOK Inc (NYSE:OKE) from Neutral to Buy and established a price target of $76.00. The firm cited several reasons for the positive outlook, including the company’s announcement of a dividend increase for 2024, the initiation of a $2.0 billion stock buyback program, and a strategy aimed at long-term dividend growth and enhanced shareholder returns.
ONEOK’s Financial Performance and Strategic Moves
Seaport Global Securities highlighted ONEOK’s effective leverage reduction efforts, as evidenced by its strategic purchase of outstanding notes in the fourth quarter. The firm anticipates that ONEOK will deliver strong fourth-quarter results. Despite some expected short-term irregularities due to the integration of MMP and seasonal variations in the Bakken region, the analyst believes that investors will shift their focus to the company’s promising full-year outlook for 2024.
Benefits of the Acquisition of MMP and Future Prospects
The acquisition of MMP is seen as a beneficial move for ONEOK, bringing more diversity to the company’s operations and potentially mitigating the impact of weather-related volatility. Seaport Global Securities pointed out that ONEOK’s shares have underperformed compared to peers like TRGP and WMB by approximately 4.5% since the January 17 announcement detailing the dividend increase, buyback program, and long-term shareholder return strategy.
InvestingPro Insights on ONEOK Inc
Following the recent upgrade by Seaport Global Securities, investors are taking a closer look at ONEOK Inc (NYSE:OKE) and its financial health. According to InvestingPro data, ONEOK boasts a market capitalization of $40.06 billion, highlighting its significant presence in the energy sector. The company’s P/E ratio stands at a competitive 12.54, suggesting that its stock may be trading at a low price relative to near-term earnings growth, which is an InvestingPro Tip that could be particularly attractive to value investors.
ONEOK’s Commitment to Shareholder Returns and Financial Stability
ONEOK’s commitment to shareholder returns is evident not only in its recent dividend increase but also in its track record of maintaining dividend payments for 54 consecutive years, a testament to its financial stability and reliability as an income-generating investment. This aligns with the InvestingPro Tip that highlights the company’s low price volatility, providing a level of predictability and security for investors looking for stable returns.
Financial Performance and Investment Decision-Making
Moreover, the company’s financials over the last twelve months as of Q1 2023 show a gross profit of $4.953 billion and an operating income margin of 17.04%, reflecting a robust operational performance. As investors evaluate ONEOK’s potential, they can access additional InvestingPro Tips to gain deeper insights. There are currently 5 additional tips listed on InvestingPro for ONEOK, enhancing their investment decision-making with a comprehensive suite of tools and data.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
