Kinder Morgan (NYSE: KMI) and ONEOK (NYSE:OKE) are both large-cap oil & gas transportation services – nec companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.
This table compares Kinder Morgan and ONEOK’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and price targets for Kinder Morgan and ONEOK, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kinder Morgan presently has a consensus target price of $23.07, indicating a potential upside of 32.38%. ONEOK has a consensus target price of $58.42, indicating a potential upside of 11.48%. Given Kinder Morgan’s stronger consensus rating and higher probable upside, analysts plainly believe Kinder Morgan is more favorable than ONEOK.
Valuation and Earnings
This table compares Kinder Morgan and ONEOK’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Kinder Morgan||$13.06 billion||2.98||$708.00 million||$0.56||31.12|
|ONEOK||$8.92 billion||2.25||$352.03 million||$1.60||32.75|
Kinder Morgan has higher revenue and earnings than ONEOK. Kinder Morgan is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.
Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.9%. ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.7%. Kinder Morgan pays out 89.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK pays out 186.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan has increased its dividend for 14 consecutive years.
Insider and Institutional Ownership
59.0% of Kinder Morgan shares are held by institutional investors. Comparatively, 53.2% of ONEOK shares are held by institutional investors. 14.0% of Kinder Morgan shares are held by company insiders. Comparatively, 1.0% of ONEOK shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Kinder Morgan has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, ONEOK has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.
Kinder Morgan beats ONEOK on 11 of the 17 factors compared between the two stocks.
Kinder Morgan Company Profile
Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.
ONEOK Company Profile
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.
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