Analyzing ONEOK (NYSE:OKE) & TXO Partners (NYSE:TXO)

ONEOK (NYSE:OKE) and TXO Partners (NYSE:TXO) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Dividends

ONEOK pays an annual dividend of $4.28 per share and has a dividend yield of 4.5%. TXO Partners pays an annual dividend of $1.60 per share and has a dividend yield of 10.5%. ONEOK pays out 73.8% of its earnings in the form of a dividend. TXO Partners pays out -207.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ONEOK has increased its dividend for 3 consecutive years and TXO Partners has increased its dividend for 1 consecutive years. TXO Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

69.1% of ONEOK shares are owned by institutional investors. Comparatively, 27.4% of TXO Partners shares are owned by institutional investors. 0.2% of ONEOK shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares ONEOK and TXO Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEOK	$39.37 billion	1.52	$3.39 billion	$5.80	16.34
TXO Partners	$401.01 million	2.11	-$21.62 million	($0.77)	-19.78

ONEOK has higher revenue and earnings than TXO Partners. TXO Partners is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for ONEOK and TXO Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEOK	0	12	6	1	2.42
TXO Partners	1	0	1	2	3.00

ONEOK currently has a consensus price target of $96.06, suggesting a potential upside of 1.33%. TXO Partners has a consensus price target of $17.50, suggesting a potential upside of 14.91%. Given TXO Partners’ stronger consensus rating and higher probable upside, analysts clearly believe TXO Partners is more favorable than ONEOK.

Volatility and Risk

ONEOK has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, TXO Partners has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500.

Profitability

This table compares ONEOK and TXO Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONEOK	9.29%	16.41%	5.48%
TXO Partners	-9.23%	-5.59%	-2.83%

Summary

ONEOK beats TXO Partners on 12 of the 18 factors compared between the two stocks.

About ONEOK

ONEOK, Inc. engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions; and provides midstream services to producers of NGLs. It also owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Kansas, Nebraska, Iowa, and Illinois; NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois, and Indiana; transports refined petroleum products, including unleaded gasoline and diesel; and owns and operates truck- and rail-loading, and -unloading facilities connected to NGL fractionation, storage, and pipeline assets. In addition, the company transports and stores natural gas through regulated interstate and intrastate natural gas transmission pipelines, and natural gas storage facilities. Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space and rail cars. Additionally, the company transports, stores, and distributes refined products, NGLs, and crude oil, as well as conducts commodity-related activities, including liquids blending and marketing activities. It serves integrated and independent exploration and production companies; other NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; utilities; industrial companies; natural gasoline distributors; propane distributors; municipalities; ethanol producers; petrochemical, refining, and marketing companies; and heating fuel users, refineries, and exporters. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.

About TXO Partners

TXO Partners, L.P., an oil and natural gas company, focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The company was formerly known as TXO Energy Partners, L.P. and changed its name to TXO Partners, L.P. in May 2023. TXO Partners, L.P. was incorporated in 2012 and is based in Fort Worth, Texas.