Is the Market Overlooking ONEOK Stock’s Next Move?

We think ONEOK (OKE) stock could be a good value buy. It is currently trading lower than average valuation, and has reasonable revenue growth and strong margins to go with its modest valuation.

Buying stocks with low valuations or trading well below their peaks but maintaining strong margins allows investors to capture mean reversion and valuation re-rating potential. The downside risk is potentially less because high-margin businesses can sustain earnings and recover faster when sentiment or market conditions improve

What Is Happening With OKE

OKE may be down -27% so far this year but is now 38% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago, and also trades at a P/E (Price-to-Earnings) ratio that is below S&P 500 median.

The stock may not reflect it yet, but here is what’s going well for the company. ONEOK’s fee-based business model underpins stable cash flow, augmented by nearly $500 million in acquisition synergies year-to-date. Recent volume gains in Rocky Mountain and Mid-Continent NGL and natural gas throughput show operational strength, with new projects like the Bighorn plant and Eiger Express pipeline poised to expand capacity and drive future revenue. While analysts anticipate slower revenue growth and management tempered its 2026 outlook due to commodity prices, recent Q3 results exceeded expectations. The current valuation discount largely stems from past “uninspiring results” and elevated capital spending associated with integrating acquisitions.

OKE Has Strong Fundamentals

• Reasonable Revenue Growth: 58.4% LTM and 16.4% last 3 year average.
• Strong Margin: Nearly 21.2% 3-year average operating margin.
• No Major Margin Shock: ONEOK has avoided any large large margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, OKE stock trades at a PE multiple of 13.1

Below is a quick comparison of OKE fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While OKE stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. OKE fell 42% in the Dot-Com Bubble, 65% during the Global Financial Crisis, and took a 29% hit in the 2018 Correction. The Covid Pandemic was even worse, hitting a steep 80% drop, while the Inflation Shock knocked it down nearly 30%. So even with solid fundamentals, OKE isn’t immune when the market turns sour. Risk stays real when panic sets in. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read OKE Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell OKE Stock.

Stocks Like OKE

Not ready to act on OKE? Consider these alternatives:

1. Accenture (ACN)
2. Adobe (ADBE)
3. PayPal (PYPL)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Meaningfully below 1Y high
3. Current P/S < last few year average
4. Strong operating margin
5. P/E ratio below S&P 500 median

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Strategy consistent across market cycles

A Multi Asset Portfolio Gives You Safer Smarter Growth

Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices