Energy Transfer vs. ONEOK: Which Midstream Stock Is Better Positioned?

Energy Transfer ET and ONEOK Inc. OKE are key players in the Zacks Oil and gas – Production Pipeline MLB space, operating vast networks of pipelines and storage facilities for natural gas, crude oil and natural gas liquids.

The companies operating under this space play a vital role in meeting the world’s growing energy demand by delivering essential fuels used in transportation, manufacturing and households. Their operations enhance energy security, contribute to economic development, and provide critical inputs for petrochemicals and fertilizers.

Pipeline operators ensure a reliable and cost-effective supply chain to refineries, power plants, and end users, while reducing risks compared to alternative transportation methods like rail or trucking. By facilitating access to new markets for producers and ensuring uninterrupted energy flow, they remain central to economic stability.

As global energy consumption rises, these companies support conventional energy needs while increasingly advancing cleaner technologies and carbon-reduction strategies, making them vital to both current systems and the transition to a more sustainable future.

Let's compare the stocks' fundamentals to determine which one is a better investment option at present.

Factors Acting in Favor of ET Stock

Energy Transfer continues to lean on long-term, fee-based contracts that reduce direct commodity exposure and support more predictable cash generation across cycles. Management’s 2026 framework keeps fee-based earnings as the core driver, with projects and contracting designed to add incremental volumes rather than rely on price swings.

The company’s 2026 plan calls for higher growth capital than the prior year, with spending weighted toward natural gas and NGL infrastructure intended to earn mid-teens returns. The new project includes NGL export and terminal expansions, Permian processing additions and multiple pipeline projects tied to incremental demand. Management continues to target a long-term annual distribution growth rate of 3% to 5%, framing growth within a disciplined capital approach that can be effective during weaker commodity or capital market conditions.

Factors Acting in Favor of OKE Stock

ONEOK is poised to benefit from long-term fee-based commitments in all three of its segments. The company expects 90% of 2026 earnings to be fee-based. It continues to benefit from its extensive and regionally diversified operations. In 2025, Natural Gas Liquids volumes in the Rocky Mountain region rose 15% year over year, while natural gas processing volumes increased about 3%.

OKE expects 50% of its well connections in 2026 to be 3 and 4-mile laterals, up from nearly 30% in 2025 and 20% in 2024, which is likely to benefit OKE by increasing throughput volumes and supporting stronger fee-based earnings growth. In the fourth quarter of 2025, the Natural Gas Gathering and Processing segment's average processed volumes were 5,706 million cubic feet per day (MMcf/d). Natural Gas Processed total volumes (including rocky mountain, mid-continent and Permian regions) are expected to be in the range of 5,410-6,170 MMcf/d for 2026.

How Do Zacks Estimates Compare for ET & OKE?

The Zacks Consensus Estimate for Energy Transfer’s 2026 and 2027 earnings per unit indicates an increase of 22.31% and 7.85%, respectively, year over year. ET’s long-term (three to five years) earnings growth rate is 12.11%.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONEOK’s 2026 and 2027 earnings per share indicates an increase of 1.66% and 8.32%, respectively, year over year. OKE’s long-term earnings growth rate is 2.39%.

Image Source: Zacks Investment Research

Valuation for ET & OKE

Energy Transfer shares trade at a forward 12-month Price/Sales (P/S F12M) of 0.56X compared with ONEOK’s P/S F12M of 1.54X, making ET more attractive from a valuation standpoint.

ET & OKE’s Return on Equity (ROE)

ROE measures how efficiently a company is utilizing its shareholders’ funds to generate profits. Energy Transfer’s current ROE is 10.17% compared with ONEOK’s 15.29%.

ET & OKE’s Price Performance

Over the past year, shares of Energy Transfer have risen 5.8%, while those of ONEOK have declined 5.3%.

ET or OKE: Which Is a Better Choice Now?

Energy Transfer is focusing on long-term, fee-based contracts to ensure stable and predictable cash flows, minimizing exposure to commodity price volatility. ET’s 2026 strategy emphasizes increased investment in natural gas and NGL infrastructure, targeting steady returns and disciplined growth. ONEOK is positioned for steady growth through long-term fee-based contracts across its segments, supported by diversified operations and rising volumes in key regions. Higher well connectivity and expanding processing activity are expected to boost throughput and strengthen its fee-based earnings trajectory in the coming years.

Our choice at the moment is ET, given its better earnings growth projection, price performance and more attractive valuation than OKE. Both ET and OKE stocks carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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