Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
ONEOK Inc., profitability ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Gross Profit Margin
- The gross profit margin experienced an overall downward trend over the period analyzed. The margin increased from 25.18% in 2018 to a peak of 40.18% in 2020, indicating a period of improved cost management or pricing power. However, this was followed by a sharp decline to 25.9% in 2021 and a further decrease to 20% in 2022, suggesting rising costs or reduced pricing effectiveness in the later years.
- Operating Profit Margin
- The operating profit margin showed moderate fluctuations. It rose from 14.58% in 2018 to 18.83% in 2019, reflecting improved operating efficiency. Thereafter, it experienced a decline to 15.94% in 2020 and stabilized around 15.7% in 2021 before decreasing again to 12.54% in 2022. This decline in the most recent year points to potential challenges in controlling operating expenses or pressures on operating income.
- Net Profit Margin
- The net profit margin showed variability without a clear upward or downward pattern. It increased from 9.15% in 2018 to 12.58% in 2019, but then decreased significantly to 7.17% in 2020. There was a partial recovery to 9.07% in 2021, followed by a moderate decrease to 7.69% in 2022. These fluctuations may reflect changes in non-operating items, tax effects, or other below-operating-line factors impacting profitability.
- Return on Equity (ROE)
- Return on equity demonstrated notable volatility with an overall upward trend from 2018 through 2022. Starting at 17.5% in 2018, ROE increased to 20.54% in 2019, then dropped substantially to 10.14% in 2020. Thereafter, it experienced strong recoveries reaching 24.93% in 2021 and further improving to 26.52% in 2022. This pattern indicates fluctuating profitability relative to shareholder equity but strong performance in the last two years.
- Return on Assets (ROA)
- Return on assets showed a slight decline initially, dropping from 6.32% in 2018 to 5.86% in 2019, followed by a more pronounced decrease to 2.66% in 2020. However, starting in 2021, ROA improved significantly to 6.35%, continuing to rise to 7.06% in 2022. This suggests a recovery in asset utilization and profitability despite previous difficulties.
Return on Sales
Return on Investment
Gross Profit Margin
ONEOK Inc., gross profit margin calculation
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Gross profit margin = 100 × Net margin ÷ Revenues
= 100 × 4,477,026 ÷ 22,386,892 = 20.00%
- Net margin
- The net margin experienced a generally upward trend over the five-year period. Starting at 3,170,488 thousand USD in 2018, it increased gradually through 2019 and 2020. A more notable rise occurred in 2021, with the net margin reaching 4,283,654 thousand USD, continuing to increase slightly to 4,477,026 thousand USD in 2022. This reflects steady improvement in profitability, particularly from 2020 onward.
- Revenues
- Revenues exhibited significant fluctuations during the period. Initially, revenues declined from 12,593,196 thousand USD in 2018 to 8,542,242 thousand USD in 2020, representing a sizable reduction. However, a substantial recovery and growth followed, with revenues sharply increasing to 16,540,309 thousand USD in 2021 and further rising to 22,386,892 thousand USD in 2022. This suggests strong revenue growth in the last two years after a period of contraction.
- Gross profit margin
- The gross profit margin displayed pronounced variability. It started at 25.18% in 2018 and increased notably to 40.18% by 2020, marking a peak in profitability at the gross profit level. Subsequently, the margin declined sharply to 25.9% in 2021 and further to 20% in 2022. This downward trend in the last two years indicates a potential rise in cost of goods sold or pricing pressures affecting gross profitability despite increasing revenues.
- Overall Insights
- Despite the fluctuations in revenues and gross profit margin, net margin continued to improve steadily, suggesting effective management of operating expenses or other income components beyond gross profit. The recovery and growth in revenues post-2020, accompanied by a decline in gross profit margin, may indicate increased sales volumes or market expansion potentially at the cost of lower per-unit profitability. The company appears to have prioritized growth and improved final profitability metrics even amid declining gross margins.
Operating Profit Margin
ONEOK Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 2,807,419) | 2,596,259) | 1,361,357) | 1,914,353) | 1,835,464) | |
| Revenues | 22,386,892) | 16,540,309) | 8,542,242) | 10,164,367) | 12,593,196) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 12.54% | 15.70% | 15.94% | 18.83% | 14.58% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 21.42% | 14.81% | -6.22% | — | — | |
| ConocoPhillips | 36.80% | 29.84% | -12.74% | — | — | |
| Exxon Mobil Corp. | 19.82% | 11.91% | -14.85% | — | — | |
| Occidental Petroleum Corp. | 38.32% | 17.59% | -79.89% | — | — | |
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 23.01% | 14.73% | -15.83% | — | — | |
| Operating Profit Margin, Industry | ||||||
| Energy | 22.71% | 14.61% | -18.01% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 2,807,419 ÷ 22,386,892 = 12.54%
2 Click competitor name to see calculations.
- Operating Income
- Operating income shows a general upward trend over the period analyzed. It increased from approximately 1.84 billion US dollars in 2018 to roughly 2.81 billion US dollars in 2022. A decline is observed in 2020, with operating income dropping to around 1.36 billion US dollars, after which there is a sharp recovery and significant growth in the subsequent years, peaking in 2022.
- Revenues
- Revenues follow a more volatile pattern, starting at about 12.6 billion US dollars in 2018 and decreasing to 8.54 billion in 2020, which represents the lowest point in the series. From 2021 onwards, revenues increase substantially and consistently, reaching approximately 22.4 billion US dollars by the end of 2022. This recovery and growth are pronounced and exceed the levels observed at the beginning of the period.
- Operating Profit Margin
- The operating profit margin exhibits fluctuations within the range of approximately 12.5% to 18.8%. It peaked in 2019 at 18.83%, representing the highest margin in the period. After a decrease in 2020 to about 15.94%, the margin stabilizes near 15.7% in 2021 but then declines to the lowest point of 12.54% in 2022. This downward trend in margin despite increasing revenues suggests a decrease in operational efficiency or increased costs relative to revenue.
- Overall Analysis
- The data reveal that while revenue and operating income experienced a significant dip in 2020, both indicators demonstrated strong recovery and growth in the subsequent years. However, the operating profit margin did not follow the same upward trajectory, instead showing a downward trend after 2019. This divergence indicates that although the company improved its top and bottom-line figures substantially, it faced challenges in maintaining efficiency or controlling costs, affecting profitability ratios negatively in 2022.
Net Profit Margin
ONEOK Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ONEOK | 1,722,221) | 1,499,706) | 612,809) | 1,278,577) | 1,151,703) | |
| Revenues | 22,386,892) | 16,540,309) | 8,542,242) | 10,164,367) | 12,593,196) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 7.69% | 9.07% | 7.17% | 12.58% | 9.15% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 15.05% | 10.04% | -5.87% | — | — | |
| ConocoPhillips | 23.80% | 17.63% | -14.38% | — | — | |
| Exxon Mobil Corp. | 13.98% | 8.33% | -12.57% | — | — | |
| Occidental Petroleum Corp. | 36.32% | 8.95% | -83.28% | — | — | |
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.44% | 9.73% | -14.70% | — | — | |
| Net Profit Margin, Industry | ||||||
| Energy | 16.28% | 9.67% | -16.81% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net income attributable to ONEOK ÷ Revenues
= 100 × 1,722,221 ÷ 22,386,892 = 7.69%
2 Click competitor name to see calculations.
The financial data over the five-year period shows notable fluctuations and trends in net income, revenues, and net profit margin.
- Net Income Attributable to ONEOK
- Net income remained relatively high throughout the period, with a peak observed in 2022 at 1,722,221 thousand US dollars. After a decline in 2020 to 612,809 thousand US dollars, net income demonstrated a significant recovery and growth in the subsequent two years, reaching its highest level in 2022.
- Revenues
- Revenues exhibited a decreasing trend from 2018 through 2020, dropping from approximately 12.6 billion US dollars to about 8.5 billion US dollars. This decline was followed by a substantial increase in 2021 and an even more pronounced rise in 2022, where revenues reached nearly 22.4 billion US dollars, the highest in the analyzed period.
- Net Profit Margin
- The net profit margin showed variability across the years. It peaked in 2019 at 12.58%, followed by a sharp decline to 7.17% in 2020. Although it increased slightly to 9.07% in 2021, it decreased again to 7.69% in 2022. This indicates fluctuating profitability relative to revenue, with margins in 2022 lower than the peak year but stable compared to 2020.
Overall, the data reflects a period of volatility especially around the year 2020, with recovery and growth in both revenues and net income in the subsequent years. However, the net profit margin did not sustain the highs of 2019, suggesting that despite higher revenues and net income in later years, profitability efficiency relative to sales experienced some pressure.
Return on Equity (ROE)
ONEOK Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ONEOK | 1,722,221) | 1,499,706) | 612,809) | 1,278,577) | 1,151,703) | |
| Total ONEOK shareholders’ equity | 6,493,885) | 6,015,163) | 6,042,398) | 6,225,951) | 6,579,543) | |
| Profitability Ratio | ||||||
| ROE1 | 26.52% | 24.93% | 10.14% | 20.54% | 17.50% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | 22.27% | 11.24% | -4.21% | — | — | |
| ConocoPhillips | 38.91% | 17.79% | -9.05% | — | — | |
| Exxon Mobil Corp. | 28.58% | 13.67% | -14.28% | — | — | |
| Occidental Petroleum Corp. | 44.22% | 11.42% | -79.85% | — | — | |
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 28.49% | 13.14% | -13.50% | — | — | |
| ROE, Industry | ||||||
| Energy | 28.13% | 13.12% | -16.04% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net income attributable to ONEOK ÷ Total ONEOK shareholders’ equity
= 100 × 1,722,221 ÷ 6,493,885 = 26.52%
2 Click competitor name to see calculations.
The financial data reveals notable trends in net income, shareholders’ equity, and return on equity (ROE) over the five-year period ending December 31, 2022.
- Net Income Attributable to ONEOK
- The net income shows fluctuations with an overall upward trajectory. After an initial increase from approximately 1.15 billion US dollars in 2018 to around 1.28 billion in 2019, there is a significant decline in 2020 to approximately 613 million. This drop likely reflects external economic challenges or operational impacts during that year. Subsequently, net income recovers sharply in 2021 and continues to grow, reaching about 1.72 billion US dollars in 2022, the highest level in the observed period.
- Total ONEOK Shareholders’ Equity
- Total shareholders’ equity demonstrates a generally stable but slightly volatile pattern. Starting at roughly 6.58 billion US dollars in 2018, equity decreases over the next three years, reaching a low of around 6.02 billion in 2021. However, in 2022, equity rebounds to approximately 6.49 billion. The intermediate decline might indicate share repurchases, dividend distribution, or losses impacting equity, followed by restoration or capital injections in the last year.
- Return on Equity (ROE)
- ROE exhibits considerable variability but trends upward by the end of the timeframe. The ratio rises from 17.5% in 2018 to 20.54% in 2019, before dropping markedly to 10.14% in 2020. This decline aligns with the sharp decrease in net income. In 2021, ROE rebounds strongly to nearly 25%, and continues to increase, reaching 26.52% in 2022, indicative of improved profitability relative to the shareholders’ equity base.
In summary, the company's net income and ROE experienced a dip in 2020, likely due to adverse conditions during that year, but both metrics have shown robust recovery and growth by 2022. Shareholders’ equity decreased gradually until 2021 but showed signs of recovery thereafter. The data suggests enhanced efficiency and profitability in the most recent years, reflecting a positive financial performance outlook.
Return on Assets (ROA)
ONEOK Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to ONEOK | 1,722,221) | 1,499,706) | 612,809) | 1,278,577) | 1,151,703) | |
| Total assets | 24,379,094) | 23,621,613) | 23,078,754) | 21,812,121) | 18,231,671) | |
| Profitability Ratio | ||||||
| ROA1 | 7.06% | 6.35% | 2.66% | 5.86% | 6.32% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | 13.76% | 6.52% | -2.31% | — | — | |
| ConocoPhillips | 19.91% | 8.91% | -4.31% | — | — | |
| Exxon Mobil Corp. | 15.10% | 6.80% | -6.74% | — | — | |
| Occidental Petroleum Corp. | 18.32% | 3.09% | -18.52% | — | — | |
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 15.53% | 6.59% | -6.36% | — | — | |
| ROA, Industry | ||||||
| Energy | 15.14% | 6.48% | -7.40% | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net income attributable to ONEOK ÷ Total assets
= 100 × 1,722,221 ÷ 24,379,094 = 7.06%
2 Click competitor name to see calculations.
The financial data of the company over the five-year period reveals several notable trends in profitability and asset management.
- Net income attributable to ONEOK
- The net income demonstrates a fluctuating pattern. After an increase from approximately 1.15 billion USD in 2018 to about 1.28 billion USD in 2019, there was a significant decline in 2020, with net income nearly halving to around 613 million USD. However, the following years showed a strong recovery and growth, with net income rising to nearly 1.5 billion USD in 2021 and further increasing to approximately 1.72 billion USD in 2022. This suggests resilience and improved profitability post-2020.
- Total assets
- Total assets displayed a consistent upward trend throughout the period. Beginning at roughly 18.2 billion USD in 2018, assets grew steadily each year, reaching about 24.4 billion USD by the end of 2022. The growth rate slowed slightly in the later years but remained positive, indicating ongoing asset accumulation and possible expansion or investment activities.
- Return on Assets (ROA)
- ROA values mirror the fluctuations seen in net income. The metric started at 6.32% in 2018 and slightly decreased to 5.86% in 2019. A sharp decline occurred in 2020, with ROA dropping to 2.66%, reflecting the lower profitability relative to asset base during that year. Subsequently, ROA rebounded to 6.35% in 2021 and improved further to 7.06% in 2022, indicating enhanced efficiency in asset utilization and higher returns on investments.
Overall, the company experienced a dip in profitability and asset efficiency in 2020, likely due to adverse market conditions or operational challenges. However, it demonstrated strong recovery and growth in profitability and asset returns in the two following years, supported by a steady increase in total assets. This reflects improved operational performance and asset management effectiveness from 2021 onwards.