We have been accumulating OKE shares for about 18 months. The performance of the Company (and stock price) over that period has not been unsatisfactorily. The stock price, however, may have too much optimism and dividend yield premium built in. We like still the business, but are concerned about the valuation.
I would like to know what others think is the intrinsic value of the GP interest(and 50% of the LP)?
No surprises in the 2010 YoY operating numbers.
Book Value +10.9%
To justify a $65/sh valuation at a 12% discount rate, Oneok needs to continuously grow earnings at 8%. If the USA gets serious about replacing oil and coal usage with natural gas, such growth may be sustainable.
Whether to hold or sell is a tough decision. Market pricing seems efficient, but with an optimistic outlook. We are not buyers at $64.
I share your concerns about understanding OKE's valuation. Everyone on the board seems to be delighted to have been along for the ride. I am up 73% in not even a year and a half (not including dividends) and am thinking it may be prudent to take some money off the table. The old saying, "no one ever went broke taking profits."
im up +250 % dividends included in less than seven yrs. if i was lucky to sell at the top i dont know if i would be back in . i always felt the sound dividend gave me confidence in the longer term. i feel the same way today. my opinion is something positive is in store fore oke as it is up a lot on no news. perhaps a spinoff, takeover, special dividend?
it is always positive to take a profit. oke at this time gives me no reason for me to sell.
where better to have your money. I´d be interested in knowing of a stock that pays this type of dividend and has this much stability in terms of value, even if the share price eventually dips.
I´ve owned OKE for ages and as a long term dividend paying stock, I think its one of the best. But I´m certainly open to suggestions and taking money off the table at this price is not a bad idea. I just don´t see the alternative.
Valuation? Who cares? I bought my first OKE shares in Sept 2006 and OKS about 6 months later. I reinvested dividends/distributions and added some here and some there. I sold OKS about 4-5 months ago because I was too heavyily weighted in the brand. OKE is still one of my top five holdings. If I think too hard about it I might do something wrong.