New Trade for April 28th, 2023

Natural gas prices soared in 2022 following Russia’s invasion of Ukraine as sanctions on Russian energy imports imposed by Western nations–including the U.S., U.K., and EU members– limited natural gas supply and subsequently increased prices.  

Russia has even been accused of weaponizing energy prices in retaliation for sanctions. Last fall, it said the Nordstream pipeline, which has typically supplied the EU with about a third of its Russian natural gas, would be closed indefinitely for “technical reasons.” Tensions between Russia and the rest of the continent will persist as long as the war in Ukraine drags on.  

Today’s stock recommendation is an oil and gas midstream company set to report earnings next week, likely to have benefitted in Q1 from long-term natural gas storage contracts and expansions as well as rising natural gas and NGL production volumes.



ONEOK (OKE)

ONEOK not only posted strong growth in the fourth quarter but expects higher 2023 results. In Q4, ONEOK posted adjusted EBITDA growing by 14% year-over-year. For 2023, it expects adjusted EBITDA of $4.575 billion at the midpoint. This year, it will support its growth by allocating capital to high-return organic projects, leading to more robust earnings as the company realizes high returns. This should enable ONEOK to increase its dividend, currently an impressive 5.81%.

OKE is set to report first-quarter 2023 earnings on May 2, after the market close. This oil and gas midstream company’s first-quarter earnings are likely to have benefited from long-term natural gas storage contracts and expansions, as well as rising natural gas and NGL production volumes. OKE is definitely a ticker to keep an eye on as its earnings date nears.  

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