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Why Is ONEOK Outperforming Its Peers in 2018?

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Nov. 20 2020, Updated 12:25 p.m. ET

OKE’s stock price

ONEOK (OKE) stock is up nearly 4% so far in 2018. It has outperformed many of its peers during this period. Enterprise Products Partners (EPD) is down 9%, and Targa Resources (TRGP) is down 6% year-to-date. The Energy Select Sector SPDR ETF (XLE) is down 7%. Crude oil prices are up 9% year-to-date. Learn more about factors driving oil prices in Does Saudi Arabia Support the Production Cut Extension?

The above graph compares OKE with EPD, TRGP, XLE, and crude oil. ONEOK’s earnings rose 16% year-over-year in 4Q17 primarily driven by higher natural gas and NGL (natural gas liquids) volumes in the Williston and Permian basins and STACK and SCOOP areas, and higher fee rates.

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In February 2018, the company also raised its expected growth capital spending guidance for 2018 to ~$2.0 billion to $2.3 billion from the previously announced range of $1.3 billion to $1.5 billion. ONEOK expects nearly 17% growth in its 2018 earnings. To learn more about ONEOK’s performance and institutional investors’ activity in the stock, read Analyzing ONEOK in 4Q17: Earnings Rose 16%.

OKE’s moving averages

ONEOK is trading 1% below its 50-day moving average and nearly 5% above its 200-day moving average. OKE’s 200-day moving average may act as a support for the stock in the near term. ONEOK’s 50-day moving average crossed above its 200-day average in January 2018. This is considered a bullish indicator.

OKE’s yield

ONEOK raised its dividends for 4Q17 by 3.4% sequentially. ONEOK currently trades at a yield of ~5.4%. In comparison, Enterprise Products Partners yields ~6.8%, and Magellan Midstream Partners (MMP) is trading at a yield of ~6.3%. The Alerian MLP Index currently yields ~8.2%.

Let’s next take a look at the recent change in short interest in ONEOK stock.

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