ONEOK Inc. (NYSE:OKE)

Return on Assets (ROA)

The ROA exhibits a generally upward trend from early 2018 through mid-2023. Starting at 6.32% in the first quarter of 2018, it maintains a relatively stable range between 5.86% and 6.62% through 2019 and 2020, despite a dip to as low as 2.7% in the third quarter of 2020. Post-2020, the metric recovers steadily, reaching a peak of 10.12% by the second quarter of 2023. This recovery and growth indicate improving asset efficiency and profitability over the analyzed period, especially after the 2020 downturn.

Financial Leverage

Financial leverage increased steadily from 2.45 in the first quarter of 2018 to a peak of 4.09 in the third quarter of 2021, indicating a growing reliance on debt financing relative to equity. From late 2021 onwards, leverage gradually declined, reaching 3.33 by mid-2023. This suggests a strategic deleveraging or stronger equity base development during the most recent periods, potentially to reduce financial risk or improve balance sheet stability.

Return on Equity (ROE)

ROE shows strong variability but generally trends upward over the evaluation period. Beginning at 17.5% in early 2018, ROE increased to above 20% by late 2018, before experiencing a substantial fall to just under 10% during parts of 2020. After this dip, ROE recovered robustly, surpassing its previous highs and culminating at 33.72% by mid-2023, evidencing enhanced profitability and effective management of equity capital. The marked increase from 2021 onward aligns with the recovery observed in ROA and the reduced financial leverage, suggesting improved financial performance and operational efficiency.

Net Profit Margin

The net profit margin exhibited a rising trend from the first observable period in March 2019 at 9.15%, increasing steadily to a peak of 12.58% by March 2020. After this peak, there was a decline during the subsequent quarters of 2020, stabilizing around the 7.1% to 7.24% range. In 2021, the margin recovered significantly, reaching approximately 11.9% mid-year before decreasing gradually through 2022 and early 2023, with a notable increase again reaching above 12% by June 2023. This pattern indicates variability with periods of both contraction and growth in profit efficiency.

Asset Turnover

Asset turnover showed a general decline from 0.69 in March 2019 to lows around 0.37 in late 2020, indicating a decrease in the efficiency of asset utilization over that period. From early 2021, there was a notable improvement, with asset turnover steadily climbing, reaching a high of 0.93 by December 2022. A slight moderation followed in early 2023, ending near 0.8 in June 2023. Overall, this reflects improving asset efficiency after a period of decline.

Financial Leverage

Financial leverage increased from a level of 2.45 at the start of the dataset in early 2018 to a peak around 4.09 in late 2021. Thereafter, it showed a moderate decline to 3.33 by mid-2023, suggesting a reduction in reliance on debt or financial obligations over this recent period. The initial trend highlights an increased use of leverage, followed by a cautious deleveraging.

Return on Equity (ROE)

ROE followed a rising trajectory from 17.5% in March 2019, peaking at just above 20% by late 2019. There was a sharp decrease during 2020 coinciding with other profit and asset efficiency downturns, falling below 10%. From early 2021, ROE rebounded strongly, rising continuously and exceeding 33% by mid-2023. This rebound reflects a substantial improvement in shareholder value generation, likely driven by improved margins, asset utilization, and controlled leverage.

Overall Insights

The company experienced volatility in profitability and operating efficiency around 2020, which may be linked to external disruptions during that period. Following this, meaningful recoveries in profitability ratios and asset efficiency suggest effective management responses. The interplay between financial leverage and ROE indicates that the firm has optimized its capital structure over time, boosting returns to equity holders especially in recent periods. The trends point to a recovery phase with strengthening financial performance and operational improvements up to mid-2023.

The financial data reveals several notable trends across the examined periods. The tax burden ratio remains relatively stable, consistently close to 0.76-0.77, indicating a steady effective tax rate throughout the quarters. The interest burden ratio shows variability, initially stable around 0.76-0.78 but dipping to a low of 0.53 in late 2020, followed by a gradual recovery to approximately 0.82 by mid-2023, suggesting fluctuating interest expenses relative to earnings before interest and taxes.

The EBIT margin exhibits an upward trend from early 2018 through early 2019, peaking above 23% in early 2021, then generally declining till early 2023, where it recovers somewhat to over 20%. This reflects fluctuations in operational profitability, impacted potentially by changes in cost management or market conditions.

Asset turnover shows a clear declining trend from 0.69 in early 2018 to a low of around 0.37 by late 2020. However, from early 2021 onwards, it improves considerably, reaching approximately 0.93 by late 2022 before slightly decreasing to 0.80 by mid-2023. This suggests initial losses in operational efficiency per asset, followed by significant enhancement in asset utilization starting 2021.

Financial leverage steadily increases from 2.45 in early 2018 to a peak of about 4.09 in late 2021, indicating a rising reliance on debt financing relative to equity. Subsequently, it trends downward to 3.33 by mid-2023, suggesting some deleveraging or equity growth in recent periods.

The return on equity (ROE) mirrors earlier patterns seen in operational and financing metrics. ROE rises from 17.5% in mid-2018 to above 25% from late 2021 through 2022, with a marked peak exceeding 33% in early to mid-2023. This improvement reflects a combination of enhanced profitability, leverage, and efficiency gains, culminating in strong shareholder returns in the latest periods.

Tax Burden

Steady ratio approximately 0.76-0.77, indicating stable tax expense relative to pre-tax income.

Interest Burden

Fluctuates significantly, with a low point in late 2020 (0.53), followed by gradual recovery to 0.82, reflecting variable interest costs or earnings before interest and taxes.

EBIT Margin

Increases from 15.76% to peaks above 23% by early 2021, then declines before partial recovery to over 20%, showing operational profitability volatility.

Asset Turnover

Declines sharply between 2018 and 2020, then improves strongly from 2021 onward, suggesting initial efficiency loss followed by substantial operational improvement.

Financial Leverage

Rises steadily to a peak exceeding 4.0 by late 2021, then decreases to approximately 3.3, indicating increased indebtedness followed by some reduction in leverage.

Return on Equity (ROE)

Ranges from about 17.5% to a peak exceeding 33% in 2023, improving in line with profitability, efficiency, and leverage trends.

Net Profit Margin

The net profit margin demonstrates a generally positive trend from early 2019 through mid-2023, with fluctuations observed in several quarters. Starting at 9.15% in March 2019, the margin increased steadily, peaking at 12.58% in March 2020. Subsequently, there was a notable decline to 7.13% by September 2020, followed by a gradual recovery and stabilization just above 7% through the end of 2020. The margin rose again in 2021, reaching a peak of 11.91% in June, then declined progressively to around 7% in late 2022 before increasing sharply to 12.68% by June 2023. This pattern suggests periods of strong profitability interspersed with temporary contractions, likely influenced by external market conditions or internal operational changes.

Asset Turnover

Asset turnover exhibits a declining trend from early 2019 through the end of 2020, beginning at 0.69 in March 2019 and gradually falling to approximately 0.37 by December 2020. This decline indicates decreasing efficiency in utilizing assets to generate sales during this period. However, starting in March 2021, asset turnover improved consistently, reaching a high of 0.93 in March 2022. After this peak, a slight downward trend resumed, with the ratio decreasing to 0.80 by June 2023. The initial decline followed by recovery and a mild falloff suggests operational adjustments and an eventual improvement in asset use efficiency that somewhat tapered in the most recent quarter.

Return on Assets (ROA)

The return on assets reflects similar trends to net profit margin but with some divergence in magnitude. ROA started at 6.32% in March 2019, remaining relatively stable through December 2019 before experiencing a sharp drop to a low around 2.66%-2.74% during the third and fourth quarters of 2020. This downturn indicates reduced effectiveness in converting assets into net income during this period. From 2021 onward, ROA improved steadily, climbing back to 6.35% by December 2021 and continuing upward to reach 10.12% by June 2023. The strong uptick post-2020 suggests enhanced asset utilization and profitability, coinciding with the asset turnover recovery and rising net profit margins.

Tax Burden

The tax burden ratio remains relatively stable throughout the periods where data is available, consistently hovering around 0.76 to 0.77. This indicates a steady tax rate impact on pre-tax income across quarters without significant fluctuations.

Interest Burden

The interest burden ratio shows some variability over the periods analyzed. After starting around 0.76 to 0.78 in early 2019, it declines notably to a low of 0.53 in December 2020, indicating increased interest expenses relative to EBIT during that time. From early 2021 onward, there is a progressive improvement, with the ratio rising steadily to reach 0.82 by mid-2023, suggesting better control or reduction in interest costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin generally trends upward from early 2018 through 2021, peaking at 23.6% in the first quarter of 2021. This reflects increasing operational profitability. Following the peak, the margin declines steadily to a low near 12.38% by the third quarter of 2022, signaling margin compression possibly due to higher costs or lower revenues. However, in the first half of 2023, there is a significant recovery to approximately 20.12%, demonstrating a rebound in operational efficiency or pricing power.

Asset Turnover

The asset turnover ratio exhibits a clear downward trend from 0.69 in early 2018 to a low point of 0.37 by the end of 2020, indicating decreasing efficiency in generating revenue from assets. From 2021 onwards, the ratio improves markedly, climbing to a peak of 0.93 in the third quarter of 2022, before slightly retreating to 0.8 by mid-2023. This pattern suggests a period of diminished asset use efficiency followed by a strong recovery.

Return on Assets (ROA)

Return on assets closely mirrors trends seen in EBIT margin and asset turnover. Initially around 6.3% in early 2018 through 2019, it falls sharply to under 3% by late 2020, reflecting decreased profitability and asset use efficiency. Thereafter, ROA steadily improves, reaching over 10% by mid-2023. This upward trend suggests enhanced overall asset profitability driven by recovering margins and asset utilization.

Tax Burden

The tax burden ratio remains consistently stable over the periods observed, fluctuating slightly around 0.76 to 0.77. This stability indicates a relatively steady effective tax rate without significant changes over multiple quarters.

Interest Burden

The interest burden ratio shows notable volatility. Beginning at approximately 0.76-0.78 in early periods, it declines significantly around mid-2020 reaching a low near 0.53, indicating increased interest expenses reducing earnings before tax. After this trough, the ratio gradually recovers, reaching a new high of approximately 0.82 by mid-2023, suggesting an improvement in interest expense management or changes in debt servicing costs.

EBIT Margin

The EBIT margin exhibits an upward trend from early 2019, peaking at 23.6% in the first quarter of 2021, demonstrating improved operational efficiency or favorable market conditions. However, following this peak, the margin steadily declines reaching a low near 12.38% by late 2022 before beginning a recovery towards 20.12% in mid-2023. This pattern indicates a period of profitability contraction followed by a renewed strengthening of EBIT performance.

Net Profit Margin

The net profit margin follows a pattern similar to EBIT margin but is generally lower, reflecting impacts from taxes, interest, and other expenses. It increases from about 9% in early 2019 to peak in early 2021 at nearly 12%, indicating improved overall profitability. A decline follows, bottoming out around 7% in late 2022, then rising again to 12.68% by mid-2023. This trend reflects fluctuations in bottom-line profitability driven by operational and financial expense dynamics.