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Why ONEOK Has Outperformed Its Peers in 2018

Rekha Khandelwal, CFA - Author

Nov. 20 2020, Updated 10:44 a.m. ET

Stock performance

ONEOK (OKE) stock has risen ~21% so far in 2018, outperforming its peers in the midstream sector. Kinder Morgan (KMI) and Williams Companies (WMB) have each fallen ~5% over the same timeframe. The Energy Select Sector SPDR ETF (XLE) has risen ~1% YTD (year-to-date).

ONEOK’s strong operational performance over the last few quarters has likely contributed to its stock’s recent outperformance. As we discussed earlier in this series, ONEOK’s revenue and earnings grew at a faster pace than its peers’ in 2018.

The above graph compares the YTD performances of Kinder Morgan, Williams Companies, and ONEOK. Crude oil prices have risen ~14% YTD.

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Moving averages

ONEOK is trading ~4% below its 50-day moving average and 7% above its 200-day moving average. These two averages may act as resistance and support levels, respectively, for the stock in the near term. The stock fell below its 50-day moving average on August 1, and it’s fallen ~6% since then.

Kinder Morgan is trading close to its 50-day moving average and ~4% above its 200-day moving average. Williams Companies is trading slightly above its 50-day moving average. WMB’s 50-day average may act as a support for its stock in the near term. Williams Companies is trading ~4% above its 200-day moving average.

Next, let’s see how these three midstream stocks compare in terms of their current valuations.


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