Oneok Makes a Big, but Reasonable, Bet With Magellan Deal

Oneok brings together high-quality assets, some of the strongest near- to medium-term growth prospects in our coverage as Rockies volumes continue their ongoing rebound, a C-Corporation structure, and a well-respected management team in a compelling package. About 90% of the firm's earnings are fee-based, 80%-90% of its customers are investment-grade, and the firm hedges its limited commodity price exposure. The addition of Magellan's wide-moat refined product assets strengthens the business and opens up new investment opportunities by bundling different products across Oneok assets.