September 14, 2023
Top 10 Stock ONE Gas Buy Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View ONE Gas Buy

360 METRICS	September 14, 2023
VALUE
VALUE	38
GROWTH
GROWTH	45
SAFETY
SAFETY	80
SENTIMENT
SENTIMENT	42
360° VIEW
360° VIEW	55

ANALYSIS: With an Obermatt 360° View of 55 (better than 55% compared with alternatives), overall professional sentiment and financial characteristics for the stock ONE Gas are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for ONE Gas. The only rank that is above average is the consolidated Safety Rank at 80, which means that the company has a financing structure that is safer than those of 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 38, which means that the share price of ONE Gas is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 45, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 42, which means that professional investors are more pessimistic about the stock than for 58% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more

RECOMMENDATION: With a consolidated 360° View of 55, ONE Gas is better positioned than 55% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 42. The negative market view on ONE Gas may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for ONE Gas only reserved

SENTIMENT METRICS	September 14, 2023
ANALYST OPINION
ANALYST OPINION	11
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	84
MARKET PULSE
MARKET PULSE	45
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	42

ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock ONE Gas is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for ONE Gas. Analyst Opinions are at a rank of 11 (worse than 89% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in ONE Gas. More encouragingly, the Professional Investors rank is 84, which means that professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 45, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 55% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), ONE Gas has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for ONE Gas. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more

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Value Strategy: ONE Gas Stock Price Value below-average critical

VALUE METRICS	September 14, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	69
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	21
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	56
DIVIDEND YIELD
DIVIDEND YIELD	32
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	38

ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), ONE Gas shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for ONE Gas. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value concerning ONE Gas's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 56% of alternatives (44% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 32 are lower than average (dividends are expected to be lower than 68% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 21, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a hold recommendation based on ONE Gas's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for ONE Gas may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more

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Growth Strategy: ONE Gas Growth Momentum low

GROWTH METRICS	September 14, 2023
REVENUE GROWTH
REVENUE GROWTH	50
PROFIT GROWTH
PROFIT GROWTH	35
CAPITAL GROWTH
CAPITAL GROWTH	51
STOCK RETURNS
STOCK RETURNS	71
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), ONE Gas shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for ONE Gas. Sales Growth has a rank of 50 which means that currently, professionals expect the company to grow more than 50% of its competitors. Capital Growth is also above 35% of competitors with a rank of 51, and Stock Returns with the rank of 71 is also an outperformance. Only Profit Growth is low with a rank of 35 which means that currently, professionals expect the company to grow its profits less than 65% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, ONE Gas is a good growth stock. ...read more

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Safety Strategy: ONE Gas Debt Financing Safety very solid

SAFETY METRICS	September 14, 2023
LEVERAGE
LEVERAGE	78
REFINANCING
REFINANCING	8
LIQUIDITY
LIQUIDITY	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	80

ANALYSIS: With an Obermatt Safety Rank of 80 (better than 80% compared with alternatives) for 2023, the company ONE Gas has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of ONE Gas is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for ONE Gas. Leverage is at a rank of 78, meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors. Liquidity is also good at a rank of 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 8, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 92% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 80 (better than 80% compared with alternatives), ONE Gas has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for ONE Gas. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

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Combined financial peformance: ONE Gas Above-Average Financial Performance

COMBINED PERFORMANCE	September 14, 2023
VALUE
VALUE	38
GROWTH
GROWTH	45
SAFETY
SAFETY	81
COMBINED
COMBINED	70

ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), ONE Gas (Gas Utilities, USA) shares have above-average financial characteristics compared with similar stocks. Shares of ONE Gas are low in value (priced high) with a consolidated Value Rank of 38 (worse than 62% of alternatives) and show below-average growth (Growth Rank of 45) but are safely financed (Safety Rank of 80), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on ONE Gas's financial characteristics. As the company ONE Gas's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 38) and low growth (Obermatt Growth Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 80) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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