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US Equities · Finance research note

OKE — Oneok

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 14.92%
Profit Margins 10.03%
Return on Equity 15.9%
Return on Assets 5.66%
Free Float 0.63B
Dividend Yield 4.80%
Short Int % Utilisation 4.4%

2.2 Growth

Metric Value
Revenue Growth 19.6%
Free Cash Flow 0.45B
EBITDA 12.08 (Ratio)
Enterprise Value 90.67B
EV/Revenue 2.58
EV/EBITDA 12.08

Revenue growth of 19.6% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 40.62%
Risk / Std Dev (Ann.)* 26.48%
1-Year Price Return* 35.46%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $94.99
52-Week Range $64.02 – $96.07
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $33.63B $21.70B
Net income Reported net income $3.39B $3.03B
Total assets Year-end reported balance $66.64B $64.07B
Shareholders’ equity Year-end reported balance $22.48B $17.04B
Net margin Net income ÷ revenue 10.09% 13.98%
Asset turnover Revenue ÷ total assets 0.5046x 0.3387x
Equity multiplier Total assets ÷ shareholders’ equity 2.9638x 3.7608x
ROE Net margin × asset turnover × equity multiplier 15.09% 17.81%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $33.63B
Prior annual revenue $21.70B
EBIT $6.27B
Tax rate 22.90%
NOPAT = EBIT × (1 − tax rate) $4.84B
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $4.84B
Add: depreciation & amortisation $1.51B
Less: capital expenditure -$3.15B
Less/(add): working-capital cash-flow movement -$380.00M
Current unlevered FCFF $2.82B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $5.56B $1.74B -$3.62B -$437.00M $3.24B $3.13B
2 11.88% $6.22B $1.95B -$3.53B -$488.89M $4.15B $3.75B
3 8.75% $6.77B $2.12B -$3.26B -$531.67M $5.09B $4.29B
4 5.62% $7.15B $2.24B -$2.84B -$561.58M $5.98B $4.70B
5 2.50% $7.33B $2.29B -$2.29B -$575.62M $6.75B $4.96B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.71
Cost of equity 8.64%
Pre-tax cost of debt 5.50%
WACC 7.11%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $150.10B
Implied terminal EV / EBITDA 12.72x
Terminal value as % of enterprise value 83.64%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $20.82B
Present value of terminal value $106.47B
Indicated enterprise value $127.29B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $127.29B
Less: gross interest-bearing debt $32.82B
Add: cash and equivalents $78.00M
Add: affiliate investments $0.00
Less: minority interests $84.00M
Indicated common equity value $94.47B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 625,900,000.00
Share-count basis reported diluted weighted-average shares
Current market price $97.52
DCF indicative value per share $150.93
Indicative value vs. market price 54.77%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:44:33.708139 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 12.13% 10.40%
Adjusted R² 0.12 0.12
Annualised residual volatility 24.39% 24.38%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.15 (-1.06) -0.18 (-1.11)
Size (SMB) 0.34 (1.76) 0.33 (1.59)
Value (HML) 0.66 (3.95) 0.68 (3.32)
Profitability (RMW) NM -0.06 (-0.37)
Investment (CMA) NM -0.02 (-0.08)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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