Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In March 2019, ONE Gas, Inc. (NYSE:OGS) released its earnings update. Generally, analysts seem cautiously bearish, as a 6.0% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 13%. With trailing-twelve-month net income at current levels of US$172m, we should see this rise to US$183m in 2020. Below is a brief commentary on the longer term outlook the market has for ONE Gas. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect ONE Gas to keep growing?
The longer term view from the 6 analysts covering OGS is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$172m and the final forecast of US$205m by 2022, the annual rate of growth for OGS’s earnings is 6.6%. This leads to an EPS of $3.88 in the final year of projections relative to the current EPS of $3.27. Margins are currently sitting at 11%, which is expected to expand to 12% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For ONE Gas, I've put together three fundamental aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Future Earnings: How does ONE Gas's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ONE Gas? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.