ONEOK is scored 74 for moat and 52 for management. The management score rests on a return on invested capital of 8.6% and a gross margin of 21.5% — figures that describe returns closer to the cost of the capital behind them. Debt sits at 1.46x equity. A solid moat alongside mixed management is a combination worth understanding before the price matters at all.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 15.0% a year, below the 32.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 19.3x. That produces an intrinsic value of $112.20, a 10-CAP price of $61.41 and a payback time price of $96.95, with the value zone set at the highest of the three, $96.95. Today's price of $87.16 sits inside that zone.
The price sits inside the value zone, but the business scores 74 for moat and 52 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $87.16 |
| Market cap | $54.9B |
| P/E ratio | 15.0x |
| Return on invested capital | 8.6% |
| Gross margin | 21.5% |
| Debt to equity | 1.46x |
| Free cash flow yield | 5.3% |
| Growth rate used | 15.0% |
| Growth rate measured | 32.0% |
| Exit multiple assumed | 19.3x |
| Company | Moat | Buy price |
| Targa Resources (TRGP) | 49 | $157.50 |
| Kinder Morgan (KMI) | 52 | $24.34 |
| Williams Companies (WMB) | 56 | $16.29 |
| Viper Energy Inc-Cl A (VNOM) | 54 | $47.84 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of ONEOK rather than accepting ours.