ONEOK (NYSE:OKE) vs. TXO Partners (NYSE:TXO) Financial Analysis

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

Analyst Ratings

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

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

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

Insider & Institutional Ownership

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

Dividends

TXO Partners pays an annual dividend of $1.60 per share and has a dividend yield of 10.5%. ONEOK pays an annual dividend of $4.28 per share and has a dividend yield of 4.5%. TXO Partners pays out -207.8% of its earnings in the form of a dividend. ONEOK pays out 73.8% 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. TXO Partners has increased its dividend for 1 consecutive years and ONEOK has increased its dividend for 3 consecutive years. TXO Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

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

Volatility and Risk

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

Earnings & Valuation

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

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

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.

Summary

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

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.

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.