OGE Energy CorpOGE

Morningstar Rating

Stock Research and Analysis

by Ryan McLean

Low natural gas prices have dented OGE Energy's historically robust midstream natural gas segment, but the firm's regulated electric utility is helping to keep earnings on course. As the economy turns up, we think the midstream business will recover Read more

Bulls Say

Enogex, OGE's midstream natural gas business, has proved to be an effective diversification mechanism, and should see relatively robust growth during the next few years.

OGE's board recently increased the quarterly dividend to $0.355 per share from $0.348.

Automatic fuel and purchased power adjustment clauses insulate OGE from commodity price fluctuation at its regulated electric utility.

Regulators in Arkansas recently awarded OGE a $13.3 million rate increase. Read more

Bears Say

OG&E operates in a challenging regulatory environment. It was recently granted less than half the rate increase that it had requested in each of its service territories, and its proposal for a coal-fired generation facility at Red Rock was rejected.

The firm will probably continue to face scrutiny over Enogex's arrangement to supply natural gas to OG&E's power plants without undergoing a competitive bidding process.

With 88% of electric revenue concentrated in Oklahoma, OGE offers relatively little geographic diversification.

A slowdown or misstep in Enogex's expansion would threaten the firm's earnings prospects. Read more

Strategy

OGE will remain focused on its regulated electric utility, while expanding its complementary Enogex natural gas business into new geographic areas. OGE plans to boost its generation capacity through Read more

Management

Peter Delaney replaced Steven Moore as chairman and CEO after Moore passed away unexpectedly in September 2007. Under Moore's leadership, OGE consistently achieved returns on invested capital in excess of the firm's cost of capital despite a tough regulatory Read more

Profile

OGE Energy is the parent company of Oklahoma Gas & Electric, a regulated electric utility, and Enogex, a natural gas pipeline business. OG&E serves 750,000 electric Read more

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