V/S
ONEOK:
ONEOK is a natural gas distribution company established during the year 1906 in Oklahoma. Today the company is one of the largest distributor of natural gas in USA. Following is the fundamentals of the company’s stock:
- Current Price: $64.36
- 52 Week Stock Range: 39.39- 65
- Market Capitalization: $13.28 Billion
- EPS: $1.37
- PE Ratio: 46.94
- Dividend Yield: 2.40%
NATIONAL GRID PLC:
National Grid Plc is a multinational electricity and gas company. The company is headquartered in London, United Kingdom and operates in USA and UK. Following is the fundamental of company’s stock:
- Current Price: £775
- 52 Week Stock Range:£678-849.50
- Market Capitalization: £28.90 Billion
- EPS:£ 0.69
- PE Ratio: 1183.33
Both of the companies are operating in Utilities Sector. As for the outlook of utilities stock, power market is expected to continue running in place and extending the outlook of power producers. However, the year 2013 was not so good for utility industry with a total return of 12% which was half of the returns from S&P 500 index.. However, during 2014, the utility stocks are expected to return good growth and attractive yields for the investors.
OLEOK in its recent announcement on January 9th declared that it will spin off its natural gas distribution business to a separate company. The new company being formed will be called OneGas Inc and will be headquartered in Tulsa,Okla. With launch of new company, the shareholders will be benefited with fractional issue of 1 share for every 4 shares of the company held in OLEOK. In another announcement, the company will lower down its long term debt with proceeds amounting to $1.13 billion to be received from One Gas share issue. Thus, these two announcement had positive impact on the company’s stock which rose to its all time high of $64.50 on January 9th, 2014. Also with lower debt in the balance sheet, company has reduced the financial distress and is likely to attract more investment from lenders and investors.
National Grid on the other hand is in news because of its new power plant projects but the company in a statement said that it has cut its outlook for UK power plant connections on the basis that investors are not building new capacity because of unclear policy of the government on energy sector.
In comparison of both the stocks, National Grid seems a better investment and especially for someone who wishes to build wealth on the stocks and thus can undoubtedly be considered for long term portfolio.
Above table confirms our conclusion that National Grid seems to head high with growing operations and also there is a little prospect that the company will face any competition and in the free market, this scenario would provide the company with supreme pricing power to assure profitability.
Works Cited
Goldbod, Kevin. How Will National Grid Plc Fare In 2014? 6 January 2014. Web. 13 January 2014.
Miller, Travis. Outlook for Utilities Stocks. 31 December 2013. Web. January 14 2014.
Yahoo Finance. Oneok spinning off natural gas distribution ops. 13 January 2014. Web. 13 January 2014.
