Critical Contrast: NextDecade (NEXT) and ONEOK (OKE)

NextDecade (NASDAQ: NEXT) and ONEOK (NYSE:OKE) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for NextDecade and ONEOK, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NextDecade 0 2 2 0 2.50
ONEOK 0 8 8 0 2.50

NextDecade currently has a consensus target price of $10.33, indicating a potential upside of 59.96%. ONEOK has a consensus target price of $61.15, indicating a potential downside of 7.72%. Given NextDecade’s higher possible upside, equities research analysts clearly believe NextDecade is more favorable than ONEOK.

Earnings and Valuation

This table compares NextDecade and ONEOK’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NextDecade N/A N/A -$35.32 million N/A N/A
ONEOK $12.17 billion 2.24 $387.84 million $1.76 37.65

ONEOK has higher revenue and earnings than NextDecade.

Dividends

ONEOK pays an annual dividend of $3.18 per share and has a dividend yield of 4.8%. NextDecade does not pay a dividend. ONEOK pays out 180.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK has raised its dividend for 15 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
NextDecade N/A -46.96% -42.70%
ONEOK 4.51% 11.95% 4.23%

Institutional and Insider Ownership

88.9% of NextDecade shares are held by institutional investors. Comparatively, 69.7% of ONEOK shares are held by institutional investors. 11.4% of NextDecade shares are held by insiders. Comparatively, 0.5% of ONEOK shares are held by 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.

Summary

ONEOK beats NextDecade on 8 of the 12 factors compared between the two stocks.

About NextDecade

NextDecade Corporation, a liquefied natural gas (LNG) development company, engages in the development of LNG export projects and associated pipelines in the State of Texas. It intends to develop a portfolio of LNG projects, including Rio Grande LNG export facility, which has a liquefaction capacity of 27 million tons of LNG per annum located in Brownsville, Texas; and the 4.5 Bcf/d Rio Bravo Pipeline that transports natural gas from the Agua Dulce supply area to Rio Grande LNG. The company was founded in 2010 and is headquartered in The Woodlands, Texas.

About ONEOK

ONEOK, Inc., through its general partner interests in ONEOK Partners, L.P., engages in the gathering, processing, storage, and transportation of natural gas in the United States. The company operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. It owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions. The company also gathers, treats, fractionates, and transports natural gas liquids (NGL), as well as stores, markets, and distributes NGL products. It owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Missouri, Nebraska, Iowa, and Illinois; and NGL distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois, and Indiana, as well as owns and operates truck- and rail-loading, and -unloading facilities that interconnect with its NGL fractionation and pipeline assets. In addition, the company operates 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 to others. The company serves integrated and independent exploration and production companies; NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; propane distributors; ethanol producers; and petrochemical, refining, and NGL marketing companies, as well as natural gas distribution companies, electric-generation facilities, industrial companies, municipalities, and marketing companies. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.

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