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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 49.1GRADE C
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
5.7%
Sector: 9.9%
Dividend Analysis audit
INCOME
3.30%
Trailing Yield
$3.30
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
94%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ONE Gas, Inc. (OGS) receives a "Hold" rating with a composite score of 51.0/100, ranked #117 out of 4446 stocks. Key factor scores: Quality 49/100, Value 62/100, Momentum 53/100. This is quantitative analysis only — not investment advice.
ONE Gas, Inc. (OGS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ONE Gas, Inc. Do?
ONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution utility company in the United States. The company operates through three divisions: Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service. It provides natural gas distribution services to 2.2 million customers in three states. It serves residential, commercial, and transportation customers. As of December 31, 2021, it operated approximately 41,600 miles of distribution mains; and 2,400 miles of transmission pipelines, as well as had 51.4 billion cubic feet of natural gas storage capacity. ONE Gas, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma. ONE Gas, Inc. (OGS) is classified as a mid-cap stock in the Utilities sector. The company is led by CEO Robert S. McAnnally and employs approximately 3,800 people, headquartered in Oklahoma City, Oklahoma. With a market capitalization of $5.4B, OGS is one of the notable companies in the Utilities sector.
ONE Gas, Inc. (OGS) Stock Rating — Hold (April 2026)
As of April 2026, ONE Gas, Inc. receives a Hold rating with a composite score of 51.0/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.OGS ranks #117 out of 4,446 stocks in our coverage universe. Within the Utilities sector, ONE Gas, Inc. ranks #8 of 112 stocks, placing it in the top 10% of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
OGS Stock Price and 52-Week Range
ONE Gas, Inc. (OGS) currently trades at $90.00. The stock lost $0.64 (0.7%) in the most recent trading session. The 52-week high for OGS is $88.03, which means the stock is currently trading 2.2% from its annual peak. The 52-week low is $69.75, putting the stock 29.0% above its annual trough. Recent trading volume was 295K shares, suggesting relatively thin trading activity.
Is OGS Overvalued or Undervalued? — Valuation Analysis
ONE Gas, Inc. (OGS) carries a value factor score of 62/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 28.47x, compared to the Utilities sector average of 23.47x — a premium of 21%. The price-to-book ratio stands at 1.63x, versus the sector average of 1.98x. The price-to-sales ratio is 4.28x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, OGS trades at 21.87x EV/EBITDA, versus 4.75x for the sector.
Overall, OGS's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
ONE Gas, Inc. Profitability — ROE, Margins, and Quality Score
ONE Gas, Inc. (OGS) earns a quality factor score of 49/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 5.7%, compared to the Utilities sector average of 9.9%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 2.2% versus the sector average of 3.1%.
On a margin basis, ONE Gas, Inc. reports gross margins of 48.4%, compared to 53.1% for the sector. The operating margin is 27.2% (sector: 21.5%). Net profit margin stands at 13.6%, versus 12.8% for the average Utilities stock. Revenue growth is running at 7.2% on a trailing basis, compared to 20.1% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
OGS Debt, Balance Sheet, and Financial Health
ONE Gas, Inc. has a debt-to-equity ratio of 77.0%, compared to the Utilities sector average of 164.5%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 0.60x, which may signal near-term liquidity tightness. Total debt on the balance sheet is $2.64B. Cash and equivalents stand at $9M.
OGS has a beta of 0.11, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ONE Gas, Inc. is 96/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ONE Gas, Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, ONE Gas, Inc. reported revenue of $1.31B and earnings per share (EPS) of $4.39. Net income for the quarter was $197M. Gross margin was 48.4%. Operating income came in at $377M.
In FY 2025, ONE Gas, Inc. reported revenue of $1.43B and earnings per share (EPS) of $4.39. Net income for the quarter was $264M. Gross margin was 30.1%. Revenue grew 9.4% year-over-year compared to FY 2024. Operating income came in at $457M.
In Q3 2025, ONE Gas, Inc. reported revenue of $303M and earnings per share (EPS) of $0.44. Net income for the quarter was $26M. Gross margin was 74.7%. Revenue grew 7.7% year-over-year compared to Q3 2024. Operating income came in at $65M.
In Q2 2025, ONE Gas, Inc. reported revenue of $306M and earnings per share (EPS) of $0.53. Net income for the quarter was $32M. Gross margin was 61.4%. Revenue grew 8.4% year-over-year compared to Q2 2024. Operating income came in at $72M.
Over the past 8 quarters, ONE Gas, Inc. has demonstrated a growth trajectory, with revenue expanding from $282M to $1.31B. Investors analyzing OGS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
OGS Dividend Yield and Income Analysis
ONE Gas, Inc. (OGS) currently pays a dividend yield of 3.3%. At this yield, a $10,000 investment in OGS stock would generate approximately $$330.00 in annual dividend income. This compares to the Utilities sector average dividend yield of 2.8%, meaning OGS offers above-average income for its sector. The net margin of 13.6% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
OGS Momentum and Technical Analysis Profile
ONE Gas, Inc. (OGS) has a momentum factor score of 53/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 30/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 11/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
OGS vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing OGS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full OGS vs S&P 500 (SPY) comparison to assess how ONE Gas, Inc. stacks up against the broader market across all factor dimensions.
OGS Next Earnings Date
No upcoming earnings date has been announced for ONE Gas, Inc. (OGS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy OGS? — Investment Thesis Summary
ONE Gas, Inc. presents a balanced picture with arguments on both sides. The value score of 62/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 96/100) reduces downside risk.
In summary, ONE Gas, Inc. (OGS) earns a Hold rating with a composite score of 51.0/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on OGS stock.
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Institutional Research Dossier
ONE Gas, Inc. (OGS) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
ONE Gas, Inc. (OGS) receives a Hold rating, reflecting a balanced view of its stable, regulated business model against a backdrop of modest growth prospects and a valuation that appears fair relative to its peers. The company's consistent profitability and low volatility are attractive, but its relatively low return on equity and negative free cash flow raise concerns about long-term value creation. Investors should closely monitor regulatory developments and capital expenditure plans to assess the company's ability to maintain its dividend and fund future growth.
The core takeaway is that OGS offers stability and income in a defensive sector, but its growth potential is limited, and its financial performance requires careful scrutiny. While the company's valuation is not overtly expensive, it does not present a compelling buying opportunity given the existing headwinds. A neutral stance is warranted until there is evidence of improved free cash flow generation and a clearer path to sustainable growth.
Business Strategy & Overview
ONE Gas operates as a regulated natural gas distribution utility, serving approximately 2.2 million customers across Oklahoma, Kansas, and Texas. Its revenue is primarily derived from the distribution of natural gas to residential, commercial, and transportation customers. The company's strategic focus is on maintaining and upgrading its existing infrastructure, expanding its customer base within its service territories, and navigating the regulatory landscape to ensure cost recovery and fair returns on investment. The regulated nature of its business provides a degree of revenue stability, as rates are typically set by state regulatory commissions based on the company's operating costs and capital investments.
The company's three operating divisions – Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service – each operate under distinct regulatory frameworks. This geographic diversification helps to mitigate some regulatory risk, as changes in one state's regulations are unlikely to have a significant impact on the entire company. ONE Gas invests heavily in its infrastructure to ensure the safe and reliable delivery of natural gas. These investments are crucial for maintaining regulatory compliance and supporting future growth. The company also focuses on operational efficiency to control costs and improve profitability.
ONE Gas's product pipeline is essentially the natural gas distribution network itself. The company does not have a traditional product pipeline in the sense of developing new products or services. Instead, its focus is on expanding and improving its existing infrastructure to meet the growing demand for natural gas in its service territories. This includes replacing aging pipelines, upgrading metering systems, and investing in new technologies to enhance safety and reliability. The company also works closely with local communities and government agencies to promote the use of natural gas as a clean and efficient energy source.
In the broader industry context, ONE Gas operates in a sector that is undergoing significant transformation. The increasing focus on renewable energy and decarbonization is creating both challenges and opportunities for natural gas utilities. While natural gas is still expected to play a significant role in the energy mix for the foreseeable future, utilities are facing pressure to reduce their carbon footprint and invest in more sustainable energy sources. ONE Gas is actively exploring opportunities to integrate renewable natural gas (RNG) and hydrogen into its distribution system, which could help to reduce its emissions and enhance its long-term sustainability.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
7.2%
Sector: 20.1%
-64% VS SCTR
Economic Moat Analysis
ONE Gas possesses a narrow economic moat, primarily derived from efficient scale and regulatory advantages inherent in the natural gas distribution industry. The capital-intensive nature of building and maintaining a natural gas distribution network creates a significant barrier to entry for potential competitors. It is simply not economically feasible for multiple companies to build parallel distribution systems in the same geographic area. This natural monopoly characteristic allows ONE Gas to operate with limited direct competition within its service territories.
The regulatory environment further strengthens ONE Gas's moat. State regulatory commissions grant exclusive franchises to natural gas utilities, providing them with the right to serve specific geographic areas. These franchises are typically long-term and renewable, providing ONE Gas with a stable and predictable operating environment. The regulatory process also allows the company to recover its operating costs and capital investments through customer rates, ensuring a reasonable return on its invested capital. This cost recovery mechanism reduces the risk of competition and protects the company's profitability.
However, the moat is not wide due to several factors. Firstly, the regulatory environment, while providing stability, also limits the company's ability to generate excess returns. Rate increases are subject to regulatory approval, and commissions may not always grant the full amount requested. Secondly, the threat of alternative energy sources, such as electricity and renewable energy, is increasing. While natural gas is currently a cost-effective and reliable energy source, advancements in renewable energy technologies and government policies promoting decarbonization could erode the demand for natural gas over time.
Furthermore, ONE Gas does not possess significant brand recognition or customer loyalty. Natural gas is a commodity product, and customers typically do not have a strong preference for one utility over another. The primary factors influencing customer choice are price and reliability, which are largely determined by regulatory factors and infrastructure investments. Therefore, while ONE Gas benefits from efficient scale and regulatory advantages, its moat is not as strong as companies with differentiated products or services, or those with significant brand loyalty.
Financial Health & Profitability
ONE Gas's financial health presents a mixed picture. The company demonstrates consistent profitability, with a net income of $264.22 million on revenue of $1.43 billion in the most recent fiscal year. This translates to a net margin of 13.6%, which is slightly higher than the sector average of 12.8%. The operating margin of 27.2% also exceeds the sector average of 21.7%, indicating efficient cost management. However, the company's revenue growth of 7.2% lags behind the sector average of 20.1%, suggesting limited organic growth opportunities.
A significant concern is the company's negative free cash flow of -$359.20 million. This indicates that ONE Gas is not generating enough cash from its operations to cover its capital expenditures and other cash outflows. This reliance on external financing to fund its operations could put pressure on its balance sheet and limit its ability to invest in future growth. The company's current ratio of 0.60 suggests a potential liquidity risk, as its current liabilities exceed its current assets.
ONE Gas's balance sheet is moderately leveraged, with a total debt of $2.64 billion and a debt-to-equity ratio of 77.00, which is significantly lower than the sector average of 165.00. This suggests that the company is not excessively reliant on debt financing. However, the company's low cash balance of $9.05 million raises concerns about its ability to meet its short-term obligations. The company's return on equity (ROE) of 5.7% is significantly lower than the sector average of 10.0%, indicating that it is not generating as much profit from its shareholders' equity as its peers.
Looking at the quarterly financial history, the gross margin has fluctuated significantly, ranging from -81.7% to 78.8%. This volatility is likely due to fluctuations in natural gas prices and the timing of regulatory rate adjustments. The operating margin has been more stable, consistently hovering around 30%, indicating effective cost control. Overall, ONE Gas's financial health is stable but not exceptional. The company's consistent profitability and moderate leverage are positive factors, but its negative free cash flow and low ROE are areas of concern.
Valuation Assessment
ONE Gas's valuation appears to be fair relative to its peers in the utilities sector. The company's price-to-earnings (P/E) ratio of 19.1x is lower than the sector average of 22.7x, suggesting that it is relatively undervalued based on its earnings. Similarly, its enterprise value-to-EBITDA (EV/EBITDA) ratio of 4.3x is also lower than the sector average of 4.8x, further supporting the notion that the company is not overvalued. However, these multiples should be interpreted with caution, as they do not fully reflect the company's negative free cash flow and relatively low growth prospects.
A discounted cash flow (DCF) analysis would be necessary to determine the intrinsic value of ONE Gas more accurately. However, given the company's negative free cash flow and limited growth potential, it is unlikely that a DCF analysis would yield a significantly higher valuation than its current market price. The company's dividend yield, which is not provided in the data, would also be a key factor in determining its attractiveness to income-seeking investors. A higher dividend yield could compensate for the company's limited growth prospects.
Compared to its historical valuation, ONE Gas's current P/E ratio is within its historical range, suggesting that the stock is not significantly overvalued or undervalued. However, it is important to note that the company's financial performance has been relatively stable over the past few years, with consistent profitability but limited growth. Therefore, a significant re-rating of the stock is unlikely unless there is a material change in its financial performance or growth prospects.
In summary, ONE Gas's valuation appears to be fair based on its P/E and EV/EBITDA ratios, but its negative free cash flow and limited growth potential warrant caution. The stock is not overtly expensive, but it does not present a compelling buying opportunity given the existing headwinds. A neutral stance is warranted until there is evidence of improved free cash flow generation and a clearer path to sustainable growth.
Risk & Uncertainty
ONE Gas faces several specific risks and uncertainties that could impact its financial performance and valuation. Regulatory risk is a significant concern, as the company's rates are subject to approval by state regulatory commissions. Changes in regulatory policies or adverse decisions by commissions could negatively impact the company's revenue and profitability. For example, if regulators do not allow the company to fully recover its capital investments, its returns on investment could be lower than expected.
Another risk is related to commodity price volatility. While ONE Gas primarily distributes natural gas, fluctuations in natural gas prices can impact customer demand and the company's operating costs. Higher natural gas prices could lead to lower demand, while lower prices could reduce the company's revenue. The company attempts to mitigate this risk through hedging strategies and cost recovery mechanisms, but these measures may not fully protect it from price volatility.
Environmental regulations and the increasing focus on decarbonization also pose a risk to ONE Gas. Government policies promoting renewable energy and reducing greenhouse gas emissions could erode the demand for natural gas over time. The company is actively exploring opportunities to integrate renewable natural gas (RNG) and hydrogen into its distribution system, but these initiatives are still in their early stages and may not fully offset the impact of decarbonization efforts.
Finally, operational risks, such as pipeline leaks, explosions, and other accidents, could result in significant financial losses and reputational damage. ONE Gas invests heavily in its infrastructure to ensure the safe and reliable delivery of natural gas, but accidents can still occur. These events could lead to regulatory fines, legal liabilities, and disruptions to the company's operations.
Bulls Say / Bears Say
The Bull Case
BULL VIEWONE Gas offers a stable, regulated business model with predictable cash flows, making it an attractive investment in a defensive sector.
BULL VIEWThe company's geographic diversification across three states mitigates regulatory risk and provides a solid foundation for long-term growth.
BULL VIEWONE Gas's commitment to infrastructure upgrades ensures the safe and reliable delivery of natural gas, supporting its regulatory compliance and future growth prospects.
The Bear Case
BEAR VIEWONE Gas's negative free cash flow raises concerns about its ability to fund future growth and maintain its dividend without relying on external financing.
BEAR VIEWThe company's relatively low return on equity indicates that it is not generating as much profit from its shareholders' equity as its peers, limiting its long-term value creation potential.
BEAR VIEWIncreasing environmental regulations and the focus on decarbonization pose a significant threat to ONE Gas's long-term demand for natural gas, potentially eroding its revenue and profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score OGS and 4,400+ other equities.
ONE Gas, Inc. exhibits a 196% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
2.2%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
48.4%
Sector: 53.1%
Operating Margin
Core business profitability
27.2%
Sector: 21.5%
Net Margin
Bottom-line profitability
13.6%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.83%
Yield Delta+17%
Income Projection audit
A $10,000 investment would generate approximately $330 annually in dividends at the current trailing rate.
