Intrinsic value of ONEOK - OKE

Previous Close

$56.25

  Intrinsic Value

$107.34

stock screener

  Rating & Target

str. buy

+91%

  Value-price divergence*

+61%

Previous close

$56.25

 
Intrinsic value

$107.34

 
Up/down potential

+91%

 
Rating

str. buy

 
Value-price divergence*

+61%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of OKE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 21.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.92
  27.70
  25.43
  23.39
  21.55
  19.89
  18.40
  17.06
  15.86
  14.77
  13.79
  12.92
  12.12
  11.41
  10.77
  10.19
  9.67
  9.21
  8.79
  8.41
  8.07
  7.76
  7.48
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
Revenue, $m
  0
  11,392
  14,289
  17,631
  21,430
  25,693
  30,422
  35,613
  41,260
  47,355
  53,887
  60,847
  68,224
  76,009
  84,195
  92,777
  101,752
  111,120
  120,883
  131,045
  141,616
  152,605
  164,026
  175,894
  188,227
  201,047
  214,376
  228,238
  242,663
  257,679
  273,318
Variable operating expenses, $m
 
  6,741
  8,442
  10,404
  12,634
  15,137
  17,913
  20,961
  24,277
  27,855
  31,690
  35,724
  40,054
  44,625
  49,431
  54,470
  59,739
  65,239
  70,971
  76,937
  83,143
  89,595
  96,300
  103,268
  110,509
  118,035
  125,861
  134,000
  142,468
  151,284
  160,466
Fixed operating expenses, $m
 
  2,461
  2,523
  2,586
  2,650
  2,717
  2,784
  2,854
  2,925
  2,999
  3,073
  3,150
  3,229
  3,310
  3,393
  3,477
  3,564
  3,653
  3,745
  3,838
  3,934
  4,033
  4,133
  4,237
  4,343
  4,451
  4,563
  4,677
  4,794
  4,913
  5,036
Total operating expenses, $m
  7,635
  9,202
  10,965
  12,990
  15,284
  17,854
  20,697
  23,815
  27,202
  30,854
  34,763
  38,874
  43,283
  47,935
  52,824
  57,947
  63,303
  68,892
  74,716
  80,775
  87,077
  93,628
  100,433
  107,505
  114,852
  122,486
  130,424
  138,677
  147,262
  156,197
  165,502
Operating income, $m
  1,286
  2,190
  3,325
  4,642
  6,146
  7,840
  9,724
  11,798
  14,058
  16,502
  19,124
  21,973
  24,940
  28,074
  31,371
  34,830
  38,449
  42,228
  46,167
  50,270
  54,538
  58,977
  63,592
  68,389
  73,376
  78,560
  83,952
  89,562
  95,401
  101,481
  107,816
EBITDA, $m
  1,678
  2,366
  3,532
  4,885
  6,430
  8,170
  10,105
  12,235
  14,556
  17,066
  19,758
  22,630
  25,677
  28,895
  32,281
  35,832
  39,548
  43,428
  47,473
  51,685
  56,068
  60,626
  65,364
  70,289
  75,408
  80,731
  86,267
  92,027
  98,022
  104,264
  110,768
Interest expense (income), $m
  461
  460
  588
  821
  1,089
  1,394
  1,736
  2,115
  2,531
  2,984
  3,473
  3,997
  4,555
  5,147
  5,772
  6,428
  7,117
  7,836
  8,588
  9,371
  10,186
  11,034
  11,916
  12,832
  13,784
  14,773
  15,801
  16,870
  17,982
  19,140
  20,344
Earnings before tax, $m
  958
  1,731
  2,736
  3,821
  5,057
  6,446
  7,989
  9,683
  11,527
  13,517
  15,651
  17,976
  20,385
  22,927
  25,600
  28,402
  31,332
  34,391
  37,579
  40,899
  44,352
  47,943
  51,677
  55,557
  59,592
  63,787
  68,151
  72,692
  77,419
  82,342
  87,472
Tax expense, $m
  212
  467
  739
  1,032
  1,365
  1,740
  2,157
  2,614
  3,112
  3,650
  4,226
  4,854
  5,504
  6,190
  6,912
  7,668
  8,460
  9,286
  10,146
  11,043
  11,975
  12,945
  13,953
  15,000
  16,090
  17,223
  18,401
  19,627
  20,903
  22,232
  23,617
Net income, $m
  352
  1,263
  1,998
  2,789
  3,691
  4,706
  5,832
  7,069
  8,415
  9,868
  11,425
  13,123
  14,881
  16,737
  18,688
  20,733
  22,873
  25,105
  27,433
  29,856
  32,377
  34,999
  37,724
  40,557
  43,502
  46,565
  49,750
  53,065
  56,516
  60,110
  63,854

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  249
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  16,139
  20,307
  25,471
  31,428
  38,200
  45,799
  54,228
  63,481
  73,548
  84,412
  96,056
  108,462
  121,611
  135,488
  150,080
  165,378
  181,376
  198,075
  215,477
  233,592
  252,435
  272,023
  292,381
  313,536
  335,521
  358,372
  382,131
  406,842
  432,555
  459,321
  487,198
Adjusted assets (=assets-cash), $m
  15,890
  20,307
  25,471
  31,428
  38,200
  45,799
  54,228
  63,481
  73,548
  84,412
  96,056
  108,462
  121,611
  135,488
  150,080
  165,378
  181,376
  198,075
  215,477
  233,592
  252,435
  272,023
  292,381
  313,536
  335,521
  358,372
  382,131
  406,842
  432,555
  459,321
  487,198
Revenue / Adjusted assets
  0.000
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
Average production assets, $m
  486
  615
  772
  952
  1,157
  1,387
  1,643
  1,923
  2,228
  2,557
  2,910
  3,286
  3,684
  4,104
  4,547
  5,010
  5,495
  6,000
  6,528
  7,076
  7,647
  8,241
  8,857
  9,498
  10,164
  10,857
  11,576
  12,325
  13,104
  13,915
  14,759
Working capital, $m
  -1,407
  -171
  -214
  -264
  -321
  -385
  -456
  -534
  -619
  -710
  -808
  -913
  -1,023
  -1,140
  -1,263
  -1,392
  -1,526
  -1,667
  -1,813
  -1,966
  -2,124
  -2,289
  -2,460
  -2,638
  -2,823
  -3,016
  -3,216
  -3,424
  -3,640
  -3,865
  -4,100
Total debt, $m
  9,441
  11,767
  16,415
  21,776
  27,871
  34,710
  42,296
  50,624
  59,684
  69,462
  79,942
  91,107
  102,941
  115,431
  128,563
  142,331
  156,730
  171,758
  187,420
  203,724
  220,682
  238,312
  256,634
  275,674
  295,460
  316,026
  337,409
  359,649
  382,790
  406,880
  431,969
Total liabilities, $m
  15,950
  18,276
  22,924
  28,285
  34,380
  41,219
  48,805
  57,133
  66,193
  75,971
  86,451
  97,616
  109,450
  121,940
  135,072
  148,840
  163,239
  178,267
  193,929
  210,233
  227,191
  244,821
  263,143
  282,183
  301,969
  322,535
  343,918
  366,158
  389,299
  413,389
  438,478
Total equity, $m
  189
  2,031
  2,547
  3,143
  3,820
  4,580
  5,423
  6,348
  7,355
  8,441
  9,606
  10,846
  12,161
  13,549
  15,008
  16,538
  18,138
  19,807
  21,548
  23,359
  25,243
  27,202
  29,238
  31,354
  33,552
  35,837
  38,213
  40,684
  43,255
  45,932
  48,720
Total liabilities and equity, $m
  16,139
  20,307
  25,471
  31,428
  38,200
  45,799
  54,228
  63,481
  73,548
  84,412
  96,057
  108,462
  121,611
  135,489
  150,080
  165,378
  181,377
  198,074
  215,477
  233,592
  252,434
  272,023
  292,381
  313,537
  335,521
  358,372
  382,131
  406,842
  432,554
  459,321
  487,198
Debt-to-equity ratio
  49.952
  5.790
  6.440
  6.930
  7.300
  7.580
  7.800
  7.970
  8.110
  8.230
  8.320
  8.400
  8.460
  8.520
  8.570
  8.610
  8.640
  8.670
  8.700
  8.720
  8.740
  8.760
  8.780
  8.790
  8.810
  8.820
  8.830
  8.840
  8.850
  8.860
  8.870
Adjusted equity ratio
  0.012
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  352
  1,263
  1,998
  2,789
  3,691
  4,706
  5,832
  7,069
  8,415
  9,868
  11,425
  13,123
  14,881
  16,737
  18,688
  20,733
  22,873
  25,105
  27,433
  29,856
  32,377
  34,999
  37,724
  40,557
  43,502
  46,565
  49,750
  53,065
  56,516
  60,110
  63,854
Depreciation, amort., depletion, $m
  392
  176
  207
  243
  284
  330
  381
  437
  498
  564
  635
  657
  737
  821
  909
  1,002
  1,099
  1,200
  1,306
  1,415
  1,529
  1,648
  1,771
  1,900
  2,033
  2,171
  2,315
  2,465
  2,621
  2,783
  2,952
Funds from operations, $m
  1,309
  1,439
  2,205
  3,032
  3,975
  5,036
  6,213
  7,506
  8,913
  10,432
  12,060
  13,780
  15,618
  17,558
  19,597
  21,735
  23,971
  26,306
  28,738
  31,271
  33,907
  36,647
  39,495
  42,457
  45,535
  48,736
  52,065
  55,530
  59,136
  62,892
  66,806
Change in working capital, $m
  -42
  -37
  -43
  -50
  -57
  -64
  -71
  -78
  -85
  -91
  -98
  -104
  -111
  -117
  -123
  -129
  -135
  -141
  -146
  -152
  -159
  -165
  -171
  -178
  -185
  -192
  -200
  -208
  -216
  -225
  -235
Cash from operations, $m
  1,351
  1,476
  2,248
  3,082
  4,032
  5,100
  6,284
  7,584
  8,998
  10,523
  12,158
  13,884
  15,728
  17,674
  19,720
  21,864
  24,106
  26,446
  28,885
  31,424
  34,065
  36,812
  39,667
  42,635
  45,720
  48,928
  52,265
  55,738
  59,353
  63,118
  67,041
Maintenance CAPEX, $m
  0
  -97
  -123
  -154
  -190
  -231
  -277
  -329
  -385
  -446
  -511
  -582
  -657
  -737
  -821
  -909
  -1,002
  -1,099
  -1,200
  -1,306
  -1,415
  -1,529
  -1,648
  -1,771
  -1,900
  -2,033
  -2,171
  -2,315
  -2,465
  -2,621
  -2,783
New CAPEX, $m
  -625
  -129
  -156
  -180
  -205
  -230
  -255
  -280
  -305
  -329
  -353
  -376
  -398
  -420
  -442
  -463
  -485
  -506
  -527
  -549
  -571
  -593
  -617
  -641
  -666
  -692
  -720
  -749
  -779
  -811
  -845
Cash from investing activities, $m
  -615
  -226
  -279
  -334
  -395
  -461
  -532
  -609
  -690
  -775
  -864
  -958
  -1,055
  -1,157
  -1,263
  -1,372
  -1,487
  -1,605
  -1,727
  -1,855
  -1,986
  -2,122
  -2,265
  -2,412
  -2,566
  -2,725
  -2,891
  -3,064
  -3,244
  -3,432
  -3,628
Free cash flow, $m
  736
  1,250
  1,968
  2,748
  3,637
  4,638
  5,751
  6,975
  8,308
  9,748
  11,293
  12,926
  14,673
  16,517
  18,457
  20,491
  22,619
  24,841
  27,158
  29,569
  32,079
  34,689
  37,402
  40,222
  43,154
  46,203
  49,374
  52,674
  56,109
  59,686
  63,413
Issuance/(repayment) of debt, $m
  456
  2,575
  4,648
  5,361
  6,095
  6,839
  7,586
  8,328
  9,060
  9,778
  10,480
  11,165
  11,834
  12,490
  13,133
  13,768
  14,398
  15,028
  15,662
  16,304
  16,958
  17,630
  18,322
  19,040
  19,786
  20,566
  21,383
  22,240
  23,141
  24,090
  25,089
Issuance/(repurchase) of shares, $m
  22
  578
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -67
  3,153
  4,648
  5,361
  6,095
  6,839
  7,586
  8,328
  9,060
  9,778
  10,480
  11,165
  11,834
  12,490
  13,133
  13,768
  14,398
  15,028
  15,662
  16,304
  16,958
  17,630
  18,322
  19,040
  19,786
  20,566
  21,383
  22,240
  23,141
  24,090
  25,089
Total cash flow (excl. dividends), $m
  669
  4,403
  6,616
  8,109
  9,732
  11,477
  13,337
  15,303
  17,368
  19,526
  21,773
  24,091
  26,507
  29,007
  31,590
  34,259
  37,018
  39,870
  42,820
  45,873
  49,037
  52,318
  55,724
  59,262
  62,941
  66,769
  70,757
  74,914
  79,250
  83,776
  88,503
Retained Cash Flow (-), $m
  147
  -1,842
  -516
  -596
  -677
  -760
  -843
  -925
  -1,007
  -1,086
  -1,164
  -1,241
  -1,315
  -1,388
  -1,459
  -1,530
  -1,600
  -1,670
  -1,740
  -1,812
  -1,884
  -1,959
  -2,036
  -2,116
  -2,198
  -2,285
  -2,376
  -2,471
  -2,571
  -2,677
  -2,788
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,561
  6,100
  7,513
  9,055
  10,717
  12,494
  14,377
  16,361
  18,440
  20,609
  22,851
  25,192
  27,619
  30,131
  32,730
  35,418
  38,200
  41,079
  44,062
  47,153
  50,359
  53,688
  57,146
  60,742
  64,484
  68,381
  72,443
  76,679
  81,099
  85,715
Discount rate, %
 
  13.30
  13.97
  14.66
  15.40
  16.17
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.75
  23.88
  25.08
  26.33
  27.65
  29.03
  30.48
  32.01
  33.61
  35.29
  37.05
  38.91
  40.85
  42.89
  45.04
  47.29
  49.65
  52.14
  54.74
PV of cash for distribution, $m
 
  2,261
  4,696
  4,984
  5,106
  5,066
  4,877
  4,561
  4,148
  3,669
  3,158
  2,643
  2,153
  1,706
  1,313
  982
  713
  501
  342
  225
  143
  88
  52
  30
  16
  9
  4
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6
  76.6

ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company's operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.

FINANCIAL RATIOS  of  ONEOK (OKE)

Valuation Ratios
P/E Ratio 33.7
Price to Sales 1.3
Price to Book 62.7
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow 16.3
Growth Rates
Sales Growth Rate 14.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -47.4%
Cap. Spend. - 3 Yr. Gr. Rate -22.6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 4190.5%
Total Debt to Equity 4995.2%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 3.8%
Return On Total Capital 3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 134.1%
Return On Equity - 3 Yr. Avg. 69.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 20.3%
EBITDA Margin - 3 Yr. Avg. 16.1%
Operating Margin 14.4%
Oper. Margin - 3 Yr. Avg. 11.4%
Pre-Tax Margin 10.7%
Pre-Tax Margin - 3 Yr. Avg. 8.1%
Net Profit Margin 3.9%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 22.1%
Eff/ Tax Rate - 3 Yr. Avg. 22.3%
Payout Ratio 147.2%

OKE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OKE stock intrinsic value calculation we used $8921 million for the last fiscal year's total revenue generated by ONEOK. The default revenue input number comes from 2016 income statement of ONEOK. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our OKE stock valuation model: a) initial revenue growth rate of 27.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 13.3%, whose default value for OKE is calculated based on our internal credit rating of ONEOK, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of ONEOK.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of OKE stock the variable cost ratio is equal to 59.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2401 million in the base year in the intrinsic value calculation for OKE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5% for ONEOK.

Corporate tax rate of 27% is the nominal tax rate for ONEOK. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the OKE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for OKE are equal to 5.4%.

Life of production assets of 2.6 years is the average useful life of capital assets used in ONEOK operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for OKE is equal to -1.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $189 million for ONEOK - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 381.29 million for ONEOK is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of ONEOK at the current share price and the inputted number of shares is $21.4 billion.

RELATED COMPANIES Price Int.Val. Rating
WMB Williams 29.94 1.41  str.sell
EQT EQT 62.56 8.48  str.sell
TRGP Targa Resource 45.69 6.05  str.sell
BPL Buckeye Partne 55.04 14.05  str.sell
PAA Plains All Ame 20.72 4.37  str.sell
MMP Magellan Midst 69.16 27.80  str.sell

COMPANY NEWS

▶ 3 Great Stocks for Your Roth IRA   [Oct-16-17 11:27AM  Motley Fool]
▶ Is It Time To Sell ONEOK Inc (OKE)?   [Oct-03-17 02:56PM  Simply Wall St.]
▶ Which Pipeline Company Is the Best Dividend Stock?   [Sep-27-17 02:21PM  Motley Fool]
▶ 3 High Dividend Yields That Are Here to Stay   [Sep-26-17 08:13AM  Motley Fool]
▶ More than 70% of the Analysts Rate ONEOK as a Hold   [Sep-22-17 03:05PM  Market Realist]
▶ Can ONEOK Stock Gain Upward Momentum?   [01:36PM  Market Realist]
▶ Top performers of the 8% XLE jump   [01:19PM  CNBC Videos]
▶ Better Buy: Kinder Morgan, Inc. vs. ONEOK, Inc.   [Sep-14-17 02:17PM  Motley Fool]
▶ How ONEOK Has Managed Its Impressive Dividend Yield   [Sep-11-17 12:32PM  Market Realist]
▶ Hate Checking Your Portfolio? Try These 3 Stocks   [Sep-09-17 03:34PM  Motley Fool]
▶ 6 MLPs With Sustainable Yields of 6% or More   [Sep-07-17 04:11PM  Barrons.com]
▶ 3 High-Yield Commodity Stocks   [Sep-02-17 09:05AM  Motley Fool]
▶ ONEOK, Inc. Value Analysis (NYSE:OKE) : August 25, 2017   [Aug-25-17 07:38PM  Capital Cube]
▶ 3 High-Yield Dividend Stocks for August   [Aug-19-17 03:34PM  Motley Fool]
▶ What Does ONEOKs Leverage Indicate?   [09:06AM  Market Realist]
▶ ONEOK Offers Attractive Dividend Growth   [07:37AM  Market Realist]
▶ ONEOKs Earnings Growth across Its Businesses   [11:30AM  Market Realist]
▶ Is ONEOK Stock Currently Overvalued?   [09:06AM  Market Realist]
▶ Short Interest in ONEOK Has Fallen 9% since July 14   [Aug-14-17 05:06PM  Market Realist]
▶ ONEOK Is Down 10% Year-to-DateWhats Ahead?   [03:09PM  Market Realist]
▶ ONEOK: What Are Analysts Recommendations?   [Aug-03-17 07:38AM  Market Realist]
▶ ONEOK Expects Strong Volume Growth in 2017   [Aug-02-17 01:35PM  Market Realist]
▶ What Drove ONEOKs 2Q17 Earnings?   [12:05PM  Market Realist]
▶ Oneok misses 2Q profit forecasts   [Aug-01-17 09:49PM  Associated Press]
▶ Analysts Rating Upgrades for ONEOK   [Jul-27-17 07:41AM  Market Realist]
▶ ONEOK Announces 21 Percent Quarterly Dividend Increase   [Jul-26-17 04:15PM  PR Newswire]
▶ Will 2Q17 Results Boost ONEOK Stock?   [11:06AM  Market Realist]
▶ ONEOKs Dividend Growth in 2Q17 and Beyond   [07:45AM  Market Realist]
▶ ONEOKs 2Q17 Earnings Are Expected to Rise 14%   [07:45AM  Market Realist]
▶ 3 High-Yield Dividend Stocks for July   [Jul-24-17 04:30PM  Motley Fool]
▶ If You Like Dividends, You Should Love These 3 Stocks   [Jul-13-17 10:31AM  Motley Fool]
▶ ONEOK Announces $1.2 Billion Notes Offering   [Jul-10-17 04:15PM  PR Newswire]
▶ 3 Growth Dividend Stocks for July   [Jul-08-17 11:06AM  Motley Fool]
▶ ONEOK Was the S&P 500s Top Gainer on July 6   [Jul-07-17 09:52AM  Market Realist]
▶ The Hot Stock: Oneok Climbs 3.6%   [Jul-06-17 04:42PM  Barrons.com]
▶ ONEOK Announces Closing of Merger Transaction   [Jun-30-17 04:15PM  PR Newswire]
▶ A Look at Williams Partners Technical Indicators   [Jun-28-17 07:36AM  Market Realist]
▶ 2 Stocks With Better Dividends Than ConocoPhillips   [Jun-27-17 02:15PM  Motley Fool]
▶ Why ONEOK Inc Could Be a Gold Mine for Income Investors   [Jun-21-17 10:00AM  Motley Fool]
Financial statements of OKE
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.