# ONEOK Inc. (OKE) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/OKE/thesis · /stocks/OKE/memo

## Financial Snapshot

### Step 04: Financial Snapshot — ONEOK, Inc. (OKE)
*Generated: 2026-05-28*

#### Executive Financial Summary

ONEOK has emerged as a financial powerhouse in the midstream sector following its transformative acquisitions. The company generated $5.6B in operating cash flow in FY2025 (+14.6% YoY) against a net income of $3.4B. The balance sheet carries significant leverage (~$32B total debt) reflecting acquisition financing, but a robust EBITDA base and strong FCF are supporting deleveraging. The dividend of $4.28/share annualized represents a ~5% yield and is well-covered by distributable cash flow.

---

#### Income Statement Analysis

##### Five-Year Summary (FY2021-FY2025)

| Metric | 2021 | 2022 | 2023 | 2024 | 2025 | CAGR |
|--------|------|------|------|------|------|------|
| Revenue ($B) | 16.54 | 22.39 | 17.68 | 21.70 | 33.63 | +19.5% |
| Gross Profit ($B) | 4.28 | 4.48 | 5.75 | 8.39 | 10.26 | +24.4% |
| GP Margin | 25.9% | 20.0% | 32.5% | 38.7% | 30.5% | — |
| Operating Income ($B) | 2.60 | 2.81 | 4.07 | 4.99 | 5.74 | +21.9% |
| EBIT Margin | 15.7% | 12.5% | 23.0% | 23.0% | 17.1% | — |
| D&A ($B) | 0.62 | 0.63 | 0.77 | 1.13 | 1.51 | +25.0% |
| EBITDA (approx.) ($B) | 3.22 | 3.44 | 4.84 | 6.12 | 7.25 | +22.4% |
| Interest Expense ($B) | 0.73 | 0.68 | 0.87 | 1.37 | 1.78 | +24.9% |
| Pre-tax Income ($B) | 1.98 | 2.25 | 3.50 | 4.11 | 4.49 | +22.7% |
| Tax Expense ($B) | 0.48 | 0.53 | 0.84 | 1.00 | 1.03 | +21.0% |
| Net Income ($B) | 1.50 | 1.72 | 2.66 | 3.03 | 3.39 | +22.6% |
| Effective Tax Rate | 24.4% | 23.5% | 24.0% | 24.3% | 22.9% | — |
| EPS (Diluted) | $3.35 | $3.84 | $5.48 | $5.17 | $5.42 | +12.8% |
| Diluted Shares (M) | 447 | 448 | 485 | 587 | 626 | +8.8% |

**Key Observations:**
- EBITDA ~$7.25B in 2025 vs. $3.22B in 2021 — more than doubling through acquisitions and organic growth
- EPS growth is more moderate (12.8% CAGR) vs. EBITDA growth (22.4%) due to significant share dilution from equity issuances for acquisitions
- The 2024 EPS dip (-5.7%) despite higher net income reflects the massive share count increase from EnLink acquisition equity
- Operating margin is compressing slightly in 2025 vs. 2023-2024 as EnLink's higher revenue-but-lower-margin volumes are integrated

##### Profitability Ratios

| Ratio | 2021 | 2022 | 2023 | 2024 | 2025 |
|-------|------|------|------|------|------|
| Gross Margin | 25.9% | 20.0% | 32.5% | 38.7% | 30.5% |
| EBIT Margin | 15.7% | 12.5% | 23.0% | 23.0% | 17.1% |
| Net Margin | 9.1% | 7.7% | 15.0% | 14.0% | 10.1% |
| EBITDA Margin (approx.) | 19.5% | 15.4% | 27.4% | 28.2% | 21.6% |

**Note on Margin Compression:** The apparent margin compression in 2025 is partially structural. Revenue includes significant pass-through commodity costs (natural gas and NGL commodity sales where OKE acts as principal). Gross profit and EBITDA margins are more meaningful than net margins for midstream comparison.

---

#### Balance Sheet Analysis

##### Year-End Balance Sheet ($B)

| Item | 2021 | 2022 | 2023 | 2024 | 2025 |
|------|------|------|------|------|------|
| Cash & Equivalents | 0.15 | 0.22 | 0.34 | 0.73 | 0.08 |
| Accounts Receivable | 1.44 | 1.53 | 1.71 | 2.33 | 3.01 |
| Inventory | 0.15 | 0.15 | 0.64 | 0.75 | 0.95 |
| Total Current Assets | 2.37 | 2.55 | 3.11 | 4.24 | 4.49 |
| Net PP&E | 19.32 | 19.95 | 32.70 | 45.94 | 47.86 |
| Goodwill | 0.53 | 0.53 | 4.95 | 8.09 | 8.06 |
| Other Intangibles | — | 0.23 | 1.32 | 3.04 | 2.90 |
| Total Assets | 23.62 | 24.38 | 44.27 | 64.07 | 66.64 |
| LT Debt | 12.75 | 12.70 | 21.18 | 31.02 | 30.76 |
| Current Debt | 0.90 | 0.94 | 0.48 | 1.06 | 1.24 |
| Total Debt | 13.64 | 13.62 | 21.67 | 32.08 | 32.00 |
| Total Liabilities | 17.61 | 17.88 | 27.78 | 41.94 | 44.07 |
| Stockholders' Equity | 6.02 | 6.49 | 16.48 | 17.04 | 22.49 |

**Key Balance Sheet Observations:**
- Total assets nearly tripled from 2022 to 2025 ($24.4B → $66.6B) — driven by Magellan and EnLink acquisitions
- Goodwill jumped from $0.53B (2022) to $8.06B (2025) — reflects premium paid over book value for acquired assets
- Net PP&E surge to $47.9B reflects the actual pipeline and infrastructure value (acquired at fair value)
- Equity more than tripled (from $6.5B to $22.5B) as equity was used to fund acquisitions
- Cash is minimal ($78M at year-end 2025) — OKE runs lean on liquidity, relying on revolving credit facility

##### Leverage Metrics

| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|--------|------|------|------|------|------|
| Total Debt ($B) | 13.64 | 13.62 | 21.67 | 32.08 | 32.00 |
| EBITDA (approx.) ($B) | 3.22 | 3.44 | 4.84 | 6.12 | 7.25 |
| Net Debt ($B) | 13.49 | 13.40 | 21.33 | 31.35 | 31.92 |
| Net Debt/EBITDA | 4.19x | 3.90x | 4.41x | 5.12x | 4.40x |
| Interest Coverage (EBIT/Int. Exp.) | 3.6x | 4.1x | 4.7x | 3.6x | 3.2x |
| Debt/Equity | 2.27x | 2.10x | 1.31x | 1.88x | 1.42x |

**Leverage Assessment:** Net Debt/EBITDA at ~4.4x is elevated but improving from the post-acquisition peak of ~5.1x in 2024. Management's target is ≤3.5x. The trajectory suggests reaching this target by 2027-2028 if EBITDA continues growing at 10-15% and FCF is applied to debt reduction. Investment-grade credit rating (Moody's Baa2 / S&P BBB) is maintained.

---

#### Cash Flow Analysis

##### Annual Cash Flow ($B)

| Item | 2021 | 2022 | 2023 | 2024 | 2025 |
|------|------|------|------|------|------|
| Operating CF | 2.55 | 2.91 | 4.42 | 4.89 | 5.60 |
| CapEx | (0.70) | (1.20) | (1.60) | (2.02) | (3.15) |
| Free Cash Flow | 1.85 | 1.70 | 2.83 | 2.87 | 2.45 |
| Acquisitions | 0.00 | 0.00 | (5.02) | (5.83) | (0.03) |
| Dividends Paid | (1.67) | (1.67) | (1.84) | (2.31) | (2.58) |
| Net Debt Issued | (0.61) | (0.03) | +3.998 | +5.09 | +0.01 |

**Key Cash Flow Observations:**
- FCF dipped in 2025 ($2.45B) vs. 2024 ($2.87B) despite higher OCF due to surging CapEx ($3.15B vs. $2.02B)
- FY2025 CapEx elevation reflects growth projects: Northern Border Pipeline expansion, Gulf Coast NGL fractionator additions, and post-EnLink integration capital
- Dividend payout from FCF: $2.58B dividends vs. $2.45B FCF = FCF coverage ratio <1.0x on strict basis; however, management uses Distributable Cash Flow (DCF) metric which adjusts for certain items — DCF coverage likely remains above 1.1-1.2x
- Major acquisition spending largely complete (2023 Magellan $5.0B cash + equity; 2024 EnLink $5.8B cash + equity)

##### FCF to Dividend Coverage Trend

| Year | FCF | Dividends | Coverage |
|------|-----|-----------|---------|
| 2021 | 1.85 | 1.67 | 1.11x |
| 2022 | 1.70 | 1.67 | 1.02x |
| 2023 | 2.83 | 1.84 | 1.54x |
| 2024 | 2.87 | 2.31 | 1.24x |
| 2025 | 2.45 | 2.58 | 0.95x |

**Note:** The sub-1.0x FCF coverage in 2025 is concerning on a strict basis. However: (1) CapEx includes significant growth spending that creates future EBITDA, (2) management's DCF metric (which adds back non-cash items and adjusts for certain working capital) shows stronger coverage, and (3) the revolving credit facility provides liquidity support. This is a monitored risk, not an immediate crisis.

---

#### Return Metrics

| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|--------|------|------|------|------|------|
| ROE | 24.9% | 26.5% | 16.1% | 17.8% | 15.1% |
| ROIC (approx.) | ~7.5% | ~8.0% | ~7.2% | ~6.5% | ~6.8% |
| ROA | 6.3% | 7.1% | 6.0% | 4.7% | 5.1% |

**ROIC Analysis:** ROIC has modestly declined from ~8% (2022) to ~7% (2025) as large acquisitions at premium prices dilute near-term returns. Infrastructure assets typically earn 6-8% unlevered returns (cost-of-service framework); OKE's ROIC is consistent with industry norms. Return enhancement comes from leverage and operational optimization over time.

---

#### Valuation Snapshot

| Metric | Value (May 2026) |
|--------|-----------------|
| Stock Price | ~$87-89 |
| Market Cap | $54.83B |
| Net Debt | ~$32.0B |
| Enterprise Value | ~$86.8B |
| TTM EBITDA | ~$7.5B |
| EV/EBITDA | ~11.6x |
| P/E (TTM) | 15.5x |
| Forward P/E | 14.9x |
| Dividend Yield | 4.92% |
| P/FCF | ~24.5x |
| P/Book | ~2.4x |

**Valuation Context:** OKE trades at a discount to larger midstream peers (WMB at ~29x P/E; EPD at ~22x) largely due to integration risk premium and higher leverage. If/when the market gains confidence in EnLink integration and leverage reduction, there is a potential re-rating catalyst toward 18-20x P/E, implying 20-35% upside from current levels.

---

#### Financial Health Summary

| Category | Rating | Key Data |
|----------|--------|---------|
| Profitability | STRONG | $5.7B operating income, 17% EBIT margin |
| Revenue Quality | HIGH | ~85% fee-based |
| Cash Generation | STRONG | $5.6B operating CF |
| FCF Coverage | WATCH | FCF/dividend ratio <1.0x in 2025 (CapEx elevated) |
| Leverage | ELEVATED | 4.4x Net Debt/EBITDA; declining trajectory |
| Credit Quality | INVESTMENT GRADE | Baa2/BBB rated |
| Capital Return | GOOD | $4.28/share dividend, 5%+ yield |
| Balance Sheet | ACCEPTABLE | High gross debt; equity rebuilt post-acquisitions |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/OKE/fundamental

## Navigation

- Overview: /stocks/OKE
- Financials (this page): /stocks/OKE/financials
- Thesis: /stocks/OKE/thesis
- Investment Memo: /stocks/OKE/memo
- Coverage universe: /stocks