$ONEOK Inc (OKE.US)$Listed in 1954, solely in the USA market...

Over the past 5 years, revenue shrank in 2019 and 2020 for two years, but has surged significantly in the last two years. Operating profit has been growing continuously for 5 years, with growth maintained in 2019 and 2020 despite the impact of margin improvement and cost reduction on gross margin. Net income shrank by 52% in 2020 due to a sharp increase in interest expenses and impairment of capital assets, while growth was sustained in the other 4 years. Return on equity was mostly above 20% except in 2020, with interest expenses in 2022 accounting for 24% of operating profit.

Revenue shrank by 28.3% in the first 3 quarters of 2023, while operating profit grew by 51% due to margin improvement and cost reduction, and net income increased by 59%.

The debt-to-equity ratio has increased from 63.9% to 73.4% over the past 5 years. The proportion and growth rate of accounts receivable and inventory are relatively normal. Long-term borrowings amount to 12.696 billion, which is twice the net assets of 6.494 billion, indicating a very high leverage ratio. A significant acquisition was made in 2023Q3, resulting in an increase in goodwill and other intangible assets to 5.8 billion, reaching 6.5 billion. Net assets increased to 16.299 billion, bringing down the debt ratio to 62.9%, with long-term borrowings increasing to 21.45 billion. Interest expenses in Q3 2023 accounted for 25% of operating profit, indicating a heavy burden.

Operating cash flow has been slightly higher than investment net cash flow for the past 5 years, but the acquisition in 2023Q3 resulted in operating cash flow being lower than investment net cash flow, without generating shareholder surplus.

Currently, the PE ratio is 23.8, with a TTM PE ratio dropping to 16.7 and a dividend yield of 5.4%. The 5-year average net income of 1.25 billion corresponds to a 33 times PE ratio. Valuation appears to have a significant discount for growth stocks but seems high for cyclical stocks. A wait-and-see approach is advised for now.