One Gas Stock Fair Value – Hold Rating for ONE Gas Amid Balance Sheet Concerns
December 28, 2023
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ONE ($NYSE:OGS) Gas Inc. is a natural gas distribution company that serves residential, commercial, industrial, and transportation customers in Oklahoma, Kansas, Texas, and Arkansas. The balance sheet of ONE Gas is relatively weak compared to its peers, with a high debt-to-equity ratio. This suggests that the company is highly leveraged and may struggle to make payments on its debt when its operating cash flows are tight.
In addition, the company has significant deferred liabilities for pensions and other post-employment benefits that may place additional burdens on its financial position going forward. Furthermore, ONE Gas’s earnings have recently declined due to lower volumes and operating costs. This has led to a decrease in free cash flow and an increase in debt levels, exacerbating the company’s financial weakness.
Stock Price
On Tuesday, stock of ONE GAS opened at $64.9 and closed at $64.8, decreasing by 0.4% from the prior closing price of 65.1. In light of this, analysts have maintained a hold rating on ONE GAS’ stock. This is due to concerns regarding the company’s balance sheet, which may weigh on the stock’s performance in the near future. Although there is still potential for ONE GAS to gain in value, investors are recommended to take caution before investing in the company. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for One Gas. More…
| Total Revenues | Net Income | Net Margin |
| 2.58k | 227.53 | 8.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for One Gas. More…
| Operations | Investing | Financing |
| 857.54 | -691.28 | -158.59 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for One Gas. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.43k | 4.79k | 47.73 |
Key Ratios Snapshot
Some of the financial key ratios for One Gas are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 19.9% | 7.6% | 14.8% |
| FCF Margin | ROE | ROA |
| 6.6% | 9.0% | 3.2% |
Analysis – One Gas Stock Fair Value
GoodWhale has completed an analysis of ONE GAS‘s financials and we believe that the intrinsic value of ONE GAS is around $89.2, as calculated by our proprietary Valuation Line. Currently, ONE GAS is trading at $64.8, which indicates that it is undervalued by 27.3%. This presents a great opportunity for investors to capitalize on a potential upside in the stock price. More…
Peers
Gas Inc is one of the world’s leading suppliers of natural gas. The company operates in more than 30 countries and supplies natural gas to over 150 customers. Gas Inc is the largest supplier of natural gas to the United States and the largest supplier of liquefied natural gas (LNG) to China. The company has a market capitalization of over $100 billion and is headquartered in Houston, Texas.
– Mahanagar Gas Ltd ($BSE:539957)
Mahanagar Gas Ltd is an Indian city gas distribution company. It is a joint venture between GAIL and the Government of Maharashtra. The company was incorporated in 1995 and is headquartered in Mumbai.
Mahanagar Gas Ltd has a market cap of 88.58B as of March 31st, 2022. The company has a Return on Equity of 12.43%. Mahanagar Gas Ltd is involved in the business of city gas distribution and supplies natural gas to industrial, commercial and domestic consumers in Mumbai, Thane and Navi Mumbai.
– RGC Resources Inc ($NASDAQ:RGCO)
RGC Resources Inc is a natural gas company that operates in Virginia and North Carolina. The company has a market cap of 240.64M as of 2022 and a Return on Equity of -13.92%. RGC Resources Inc is engaged in the exploration, production, and distribution of natural gas. The company is also involved in the transportation and storage of natural gas.
– Gujarat State Petronet Ltd ($BSE:532702)
Gujarat State Petronet Ltd is an Indian natural gas transmission company. It is engaged in the business of natural gas transmission and marketing. The company owns and operates a network of natural gas pipelines in the states of Gujarat, Maharashtra, and Rajasthan. It also has a joint venture with GAIL (India) Ltd, for the development of a natural gas pipeline from Kakinada to Vijayawada. The company has a market cap of 133.77B as of 2022 and a Return on Equity of 22.98%.
Summary
ONE Gas is an American natural gas distribution company. Investing analysis of ONE Gas indicates that the company’s balance sheet is a cause of concern. The company has increased its long-term debt over the past few years, resulting in a higher debt-to-equity ratio. Overall, these factors suggest that investors should proceed with caution and may want to hold off on investing in ONE Gas at this time.
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