Intrinsic value of ONEOK - OKE

Previous Close

$69.93

  Intrinsic Value

$15.39

stock screener

  Rating & Target

str. sell

-78%

Previous close

$69.93

 
Intrinsic value

$15.39

 
Up/down potential

-78%

 
Rating

str. sell

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 2017), $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 20.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  36.50
  33.35
  30.52
  27.96
  25.67
  23.60
  21.74
  20.07
  18.56
  17.20
  15.98
  14.89
  13.90
  13.01
  12.21
  11.49
  10.84
  10.25
  9.73
  9.26
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
  7.04
  6.83
  6.65
  6.48
Revenue, $m
  16,618
  22,159
  28,921
  37,009
  46,508
  57,484
  69,981
  84,024
  99,619
  116,757
  135,418
  155,575
  177,195
  200,243
  224,685
  250,491
  277,637
  306,104
  335,881
  366,968
  399,370
  433,103
  468,193
  504,674
  542,589
  581,988
  622,932
  665,489
  709,735
  755,752
Variable operating expenses, $m
  14,188
  18,887
  24,620
  31,477
  39,531
  48,837
  59,432
  71,338
  84,560
  99,091
  114,814
  131,904
  150,234
  169,774
  190,497
  212,377
  235,392
  259,528
  284,775
  311,131
  338,603
  367,204
  396,955
  427,885
  460,030
  493,435
  528,149
  564,231
  601,744
  640,759
Fixed operating expenses, $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
Total operating expenses, $m
  14,188
  18,887
  24,620
  31,477
  39,531
  48,837
  59,432
  71,338
  84,560
  99,091
  114,814
  131,904
  150,234
  169,774
  190,497
  212,377
  235,392
  259,528
  284,775
  311,131
  338,603
  367,204
  396,955
  427,885
  460,030
  493,435
  528,149
  564,231
  601,744
  640,759
Operating income, $m
  2,429
  3,272
  4,301
  5,532
  6,977
  8,647
  10,549
  12,686
  15,058
  17,666
  20,605
  23,672
  26,961
  30,468
  34,187
  38,114
  42,244
  46,576
  51,107
  55,837
  60,767
  65,900
  71,239
  76,790
  82,559
  88,553
  94,783
  101,259
  107,991
  114,993
EBITDA, $m
  4,390
  5,854
  7,640
  9,776
  12,285
  15,185
  18,486
  22,196
  26,315
  30,842
  35,772
  41,096
  46,807
  52,895
  59,352
  66,169
  73,340
  80,859
  88,725
  96,937
  105,496
  114,407
  123,676
  133,313
  143,328
  153,736
  164,552
  175,793
  187,481
  199,637
Interest expense (income), $m
  461
  494
  716
  995
  1,334
  1,740
  2,217
  2,768
  3,395
  4,100
  4,882
  5,742
  6,679
  7,691
  8,776
  9,933
  11,159
  12,455
  13,817
  15,246
  16,741
  18,301
  19,927
  21,620
  23,381
  25,212
  27,115
  29,093
  31,148
  33,284
  35,505
Earnings before tax, $m
  1,936
  2,556
  3,307
  4,198
  5,237
  6,431
  7,781
  9,291
  10,959
  12,784
  14,862
  16,993
  19,271
  21,692
  24,255
  26,954
  29,790
  32,759
  35,861
  39,096
  42,466
  45,973
  49,619
  53,408
  57,346
  61,438
  65,691
  70,111
  74,707
  79,488
Tax expense, $m
  523
  690
  893
  1,133
  1,414
  1,736
  2,101
  2,509
  2,959
  3,452
  4,013
  4,588
  5,203
  5,857
  6,549
  7,278
  8,043
  8,845
  9,682
  10,556
  11,466
  12,413
  13,397
  14,420
  15,483
  16,588
  17,736
  18,930
  20,171
  21,462
Net income, $m
  1,413
  1,866
  2,414
  3,064
  3,823
  4,694
  5,680
  6,782
  8,000
  9,332
  10,850
  12,405
  14,068
  15,835
  17,706
  19,677
  21,746
  23,914
  26,178
  28,540
  31,000
  33,560
  36,222
  38,988
  41,863
  44,850
  47,954
  51,181
  54,536
  58,026

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  22,984
  30,649
  40,002
  51,188
  64,326
  79,508
  96,793
  116,216
  137,785
  161,489
  187,301
  215,180
  245,083
  276,961
  310,767
  346,460
  384,006
  423,380
  464,566
  507,563
  552,379
  599,036
  647,570
  698,028
  750,468
  804,963
  861,594
  920,455
  981,652
  1,045,300
Adjusted assets (=assets-cash), $m
  22,984
  30,649
  40,002
  51,188
  64,326
  79,508
  96,793
  116,216
  137,785
  161,489
  187,301
  215,180
  245,083
  276,961
  310,767
  346,460
  384,006
  423,380
  464,566
  507,563
  552,379
  599,036
  647,570
  698,028
  750,468
  804,963
  861,594
  920,455
  981,652
  1,045,300
Revenue / Adjusted assets
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
Average production assets, $m
  18,612
  24,819
  32,392
  41,450
  52,089
  64,382
  78,379
  94,107
  111,573
  130,768
  151,669
  174,245
  198,458
  224,272
  251,647
  280,550
  310,953
  342,836
  376,187
  411,004
  447,294
  485,076
  524,377
  565,235
  607,699
  651,827
  697,684
  745,348
  794,903
  846,442
Working capital, $m
  -964
  -1,285
  -1,677
  -2,147
  -2,697
  -3,334
  -4,059
  -4,873
  -5,778
  -6,772
  -7,854
  -9,023
  -10,277
  -11,614
  -13,032
  -14,528
  -16,103
  -17,754
  -19,481
  -21,284
  -23,163
  -25,120
  -27,155
  -29,271
  -31,470
  -33,755
  -36,130
  -38,598
  -41,165
  -43,834
Total debt, $m
  13,266
  18,417
  24,702
  32,219
  41,048
  51,250
  62,866
  75,918
  90,413
  106,342
  123,687
  142,422
  162,517
  183,939
  206,656
  230,642
  255,873
  282,332
  310,009
  338,903
  369,019
  400,373
  432,988
  466,896
  502,136
  538,756
  576,812
  616,367
  657,491
  700,262
Total liabilities, $m
  15,445
  20,596
  26,881
  34,398
  43,227
  53,429
  65,045
  78,097
  92,592
  108,521
  125,866
  144,601
  164,696
  186,118
  208,835
  232,821
  258,052
  284,511
  312,188
  341,082
  371,198
  402,552
  435,167
  469,075
  504,315
  540,935
  578,991
  618,546
  659,670
  702,441
Total equity, $m
  7,539
  10,053
  13,121
  16,790
  21,099
  26,079
  31,748
  38,119
  45,194
  52,968
  61,435
  70,579
  80,387
  90,843
  101,932
  113,639
  125,954
  138,869
  152,378
  166,481
  181,180
  196,484
  212,403
  228,953
  246,154
  264,028
  282,603
  301,909
  321,982
  342,858
Total liabilities and equity, $m
  22,984
  30,649
  40,002
  51,188
  64,326
  79,508
  96,793
  116,216
  137,786
  161,489
  187,301
  215,180
  245,083
  276,961
  310,767
  346,460
  384,006
  423,380
  464,566
  507,563
  552,378
  599,036
  647,570
  698,028
  750,469
  804,963
  861,594
  920,455
  981,652
  1,045,299
Debt-to-equity ratio
  1.760
  1.830
  1.880
  1.920
  1.950
  1.970
  1.980
  1.990
  2.000
  2.010
  2.010
  2.020
  2.020
  2.020
  2.030
  2.030
  2.030
  2.030
  2.030
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
Adjusted equity ratio
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328
  0.328

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,413
  1,866
  2,414
  3,064
  3,823
  4,694
  5,680
  6,782
  8,000
  9,332
  10,850
  12,405
  14,068
  15,835
  17,706
  19,677
  21,746
  23,914
  26,178
  28,540
  31,000
  33,560
  36,222
  38,988
  41,863
  44,850
  47,954
  51,181
  54,536
  58,026
Depreciation, amort., depletion, $m
  1,960
  2,581
  3,338
  4,244
  5,308
  6,538
  7,937
  9,510
  11,257
  13,176
  15,167
  17,424
  19,846
  22,427
  25,165
  28,055
  31,095
  34,284
  37,619
  41,100
  44,729
  48,508
  52,438
  56,524
  60,770
  65,183
  69,768
  74,535
  79,490
  84,644
Funds from operations, $m
  3,373
  4,447
  5,752
  7,309
  9,131
  11,232
  13,618
  16,292
  19,256
  22,508
  26,016
  29,829
  33,913
  38,263
  42,871
  47,732
  52,842
  58,197
  63,797
  69,641
  75,730
  82,068
  88,659
  95,512
  102,633
  110,032
  117,722
  125,716
  134,026
  142,671
Change in working capital, $m
  -258
  -321
  -392
  -469
  -551
  -637
  -725
  -814
  -904
  -994
  -1,082
  -1,169
  -1,254
  -1,337
  -1,418
  -1,497
  -1,574
  -1,651
  -1,727
  -1,803
  -1,879
  -1,957
  -2,035
  -2,116
  -2,199
  -2,285
  -2,375
  -2,468
  -2,566
  -2,669
Cash from operations, $m
  3,631
  4,768
  6,145
  7,778
  9,682
  11,869
  14,342
  17,107
  20,161
  23,502
  27,099
  30,998
  35,167
  39,599
  44,288
  49,228
  54,416
  59,848
  65,524
  71,444
  77,609
  84,024
  90,694
  97,627
  104,832
  112,318
  120,097
  128,184
  136,593
  145,340
Maintenance CAPEX, $m
  -1,363
  -1,861
  -2,482
  -3,239
  -4,145
  -5,209
  -6,438
  -7,838
  -9,411
  -11,157
  -13,077
  -15,167
  -17,424
  -19,846
  -22,427
  -25,165
  -28,055
  -31,095
  -34,284
  -37,619
  -41,100
  -44,729
  -48,508
  -52,438
  -56,524
  -60,770
  -65,183
  -69,768
  -74,535
  -79,490
New CAPEX, $m
  -4,977
  -6,207
  -7,573
  -9,058
  -10,639
  -12,293
  -13,997
  -15,728
  -17,466
  -19,195
  -20,901
  -22,576
  -24,214
  -25,813
  -27,375
  -28,903
  -30,403
  -31,883
  -33,351
  -34,817
  -36,290
  -37,782
  -39,301
  -40,859
  -42,464
  -44,127
  -45,858
  -47,664
  -49,555
  -51,539
Cash from investing activities, $m
  -6,340
  -8,068
  -10,055
  -12,297
  -14,784
  -17,502
  -20,435
  -23,566
  -26,877
  -30,352
  -33,978
  -37,743
  -41,638
  -45,659
  -49,802
  -54,068
  -58,458
  -62,978
  -67,635
  -72,436
  -77,390
  -82,511
  -87,809
  -93,297
  -98,988
  -104,897
  -111,041
  -117,432
  -124,090
  -131,029
Free cash flow, $m
  -2,710
  -3,300
  -3,911
  -4,519
  -5,102
  -5,634
  -6,093
  -6,459
  -6,716
  -6,850
  -6,879
  -6,745
  -6,471
  -6,060
  -5,514
  -4,839
  -4,042
  -3,130
  -2,111
  -992
  218
  1,513
  2,886
  4,331
  5,844
  7,420
  9,057
  10,752
  12,503
  14,310
Issuance/(repayment) of debt, $m
  4,127
  5,151
  6,285
  7,517
  8,829
  10,202
  11,616
  13,052
  14,495
  15,929
  17,345
  18,735
  20,095
  21,422
  22,718
  23,986
  25,231
  26,459
  27,677
  28,894
  30,116
  31,354
  32,615
  33,907
  35,240
  36,620
  38,056
  39,555
  41,124
  42,771
Issuance/(repurchase) of shares, $m
  598
  648
  654
  605
  486
  285
  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  
  4,725
  5,799
  6,939
  8,122
  9,315
  10,487
  11,616
  13,052
  14,495
  15,929
  17,345
  18,735
  20,095
  21,422
  22,718
  23,986
  25,231
  26,459
  27,677
  28,894
  30,116
  31,354
  32,615
  33,907
  35,240
  36,620
  38,056
  39,555
  41,124
  42,771
Total cash flow (excl. dividends), $m
  2,016
  2,500
  3,028
  3,602
  4,214
  4,853
  5,523
  6,593
  7,779
  9,079
  10,466
  11,991
  13,623
  15,362
  17,204
  19,147
  21,189
  23,329
  25,567
  27,902
  30,335
  32,867
  35,501
  38,239
  41,084
  44,041
  47,113
  50,307
  53,627
  57,081
Retained Cash Flow (-), $m
  -2,011
  -2,514
  -3,068
  -3,669
  -4,309
  -4,979
  -5,670
  -6,371
  -7,075
  -7,775
  -8,466
  -9,145
  -9,808
  -10,456
  -11,088
  -11,707
  -12,315
  -12,914
  -13,509
  -14,103
  -14,700
  -15,304
  -15,919
  -16,550
  -17,200
  -17,874
  -18,575
  -19,307
  -20,073
  -20,876
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
  24
  33
  44
  58
  74
  93
  115
  140
  168
  199
  234
  271
  311
  354
  400
  449
  501
  555
  612
  672
  734
  799
  866
  936
  1,009
  1,085
  1,164
  1,246
  1,331
  1,419
Cash available for distribution, $m
  5
  -15
  -40
  -67
  -96
  -126
  -147
  222
  704
  1,304
  2,000
  2,846
  3,815
  4,906
  6,115
  7,439
  8,874
  10,415
  12,058
  13,799
  15,635
  17,563
  19,582
  21,689
  23,884
  26,166
  28,538
  31,000
  33,555
  36,205
Discount rate, %
  9.20
  9.66
  10.14
  10.65
  11.18
  11.74
  12.33
  12.95
  13.59
  14.27
  14.99
  15.74
  16.52
  17.35
  18.22
  19.13
  20.08
  21.09
  22.14
  23.25
  24.41
  25.63
  26.91
  28.26
  29.67
  31.15
  32.71
  34.35
  36.07
  37.87
PV of cash for distribution, $m
  4
  -12
  -30
  -45
  -56
  -65
  -65
  84
  224
  344
  430
  493
  523
  522
  497
  452
  395
  333
  270
  211
  159
  116
  82
  55
  36
  23
  14
  8
  4
  2
Current shareholders' claim on cash, %
  97.2
  95.0
  93.4
  92.3
  91.6
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2
  91.2

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 41.9
Price to Sales 1.7
Price to Book 78
Price to Tangible Book
Price to Cash Flow 10.9
Price to Free Cash Flow 20.3
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 $12174 million for the last fiscal year's total revenue generated by ONEOK. The default revenue input number comes from 2017 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 36.5% 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 9.2%, 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 85.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 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 5.4% 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 0.2%.

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 112%.

Life of production assets of 10 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 -5.8%. 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 - $5528 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 297 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 $20.8 billion.

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COMPANY NEWS

▶ Jefferies Issues MLP Update With New Franchise Pick   [Jul-22-18 05:00PM  Benzinga]
▶ Stay Safe as Trade War Escalates: 5 Top Defensive Stocks   [Jul-06-18 12:30PM  InvestorPlace]
▶ 2 Stocks That Turned $5,000 Into More Than $85,000   [Jun-30-18 10:19AM  Motley Fool]
▶ ONEOK Inc. Continues to Fill Up Its Growth Tank   [Jun-28-18 12:04PM  Motley Fool]
▶ ONEOK Announces $1.25 Billion Notes Offering   [Jun-19-18 05:06PM  PR Newswire]
▶ This High-Yield Dividend Stock Is in a Class of Its Own   [Jun-17-18 09:30AM  Motley Fool]
▶ 1 High-Yield Stock to Keep an Eye On   [Jun-04-18 01:04PM  Motley Fool]
▶ 5 Reason ONEOK Inc.s Management Team Is Optimistic   [May-15-18 03:05PM  Motley Fool]
▶ Oneok: 1Q Earnings Snapshot   [May-01-18 04:39PM  Associated Press]
▶ Southern Company Leads 6 Dividend Stocks Boosting Payouts   [Apr-21-18 12:30PM  InvestorPlace]
▶ ONEOK Increases Quarterly Dividend   [Apr-19-18 04:15PM  PR Newswire]
▶ 3 Stocks for Baby Boomers to Reach Their Goals   [Apr-14-18 07:02AM  Motley Fool]
▶ ONEOK to Participate in Mizuho Energy Summit   [Apr-05-18 04:15PM  PR Newswire]
▶ ONEOK Natural Gas Pipelines Operating Normally   [Apr-03-18 06:35PM  PR Newswire]
▶ 1 High-Yield Stock I Wouldn't Touch With a 10-Foot Pole   [Mar-27-18 03:05PM  Motley Fool]
▶ Getting Technical: Shorting XOPoil & gas explorers and refiners   [Mar-15-18 10:50AM  Yahoo Finance Video]
▶ Does Kinder Morgan Inc Still Have a Debt Problem?   [Mar-12-18 04:18PM  Motley Fool]
▶ ONEOK, Inc. to Host Earnings Call   [09:45AM  ACCESSWIRE]
▶ Oneok beats 4Q profit forecasts   [Feb-26-18 04:32PM  Associated Press]
▶ ONEOK Q4 Earnings Preview   [11:11AM  Benzinga]
▶ ONEOK Posts Schedule K-1 Online   [Feb-15-18 04:15PM  PR Newswire]
▶ Get Paid While You Wait: 3 Top Dividend Stocks in Energy   [Feb-12-18 08:01AM  Motley Fool]
▶ This Stock Is a No-Brainer for Value Investors   [Jan-28-18 11:32AM  Motley Fool]
▶ ONEOK, Inc. Expects 2018 to Be a Big Year   [Jan-23-18 01:36PM  Motley Fool]
▶ ONEOK Announces 2018 Financial Guidance   [Jan-22-18 04:15PM  PR Newswire]
▶ 3 Top Oil Stocks to Buy Right Now   [Jan-20-18 06:31AM  Motley Fool]
▶ Whats Driving Williams Partners Strong Stock Performance?   [Jan-19-18 12:52PM  Market Realist]
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