OT: Yield ( around 5.30) may still be a little on the rich side (where say a kmp for example is around a 6.0 yield) , but probably a solid play over the longer term for one willing to wait for ngl prices to improve
"A day after Credit Suisse cut its rating on MLP ONEOK Partners LP (OKS), Barclays just followed suit today, cutting OKS to equal weight from overweight and lowering its price target to $60 from $68. From Barclays:
Our $60 price target is based on a 12-month distribution run rate of $3.00 and a target yield of 5%. Our previous price target of $68 was based on a distribution run rate of $3.08 and a target yield of 4.5%. The increase in our target yield reflects a reduced growth outlook….
Given reduced near-term growth prospects and our view that ethane rejection could persist during 2013-2015 as we wait for major cracker expansions in 2016/2017, we see more downside risk to management’s 3-year guidance and are therefore reducing our rating from OW to EW. We believe ownership of OKS units could generate solid double-digit total return, given $5 billion of projects under execution and $2+ billion of project opportunities in the backlog. Over the long term, we expect investors to collect a 5.3% yield and see growth ramping again post-2016 from its NGL projects. However, in the near term, we see limited upside potential."
OKS has a considerable commodity exposure, but then it uses the NG as the GP is a utility. OKS is at 5.3% but that is on a par with KMP with KMP barely covering the distribution and OKS having a cushion IMO. That said at todays market I am not a buyer of either.