On paper, the thesis to own ONEOK, Inc. (NYSE:OKE) is clear as day. President Obama has made it a priority to push America toward greater energy independence, and that’s only going to happen with the proliferation of U.S. natural gas. ONEOK, Inc. (NYSE:OKE) is absolutely loaded with natural gas reserves in Oklahoma and Kansas.
On top of its natural gas reserves, ONEOK’s limited-partnership Oneok Partners LP (NYSE:OKS) is perfectly positioned to experience solid midstream growth. With a network of transmission and storage tanks that will be called upon as drilling increases, Oneok Partners LP (NYSE:OKS) should boast incredible pricing power and profitability.
Finally, ONEOK, Inc. (NYSE:OKE) is relatively unmatched when it comes to the safety and quality of its dividend payout. The company has boosted its dividend in each of the past seven years and now yields an annualized 3.2%, which is considerably higher than the industry average. ONEOK, Inc. (NYSE:OKE) isn’t cheap at 20 times forward earnings, but a dramatic increase in NGL and natural gas demand will quickly pump up its bottom line.
Sticking with Brazil
For this week’s final pick, I’m going to revisit Brazil and highlight the Market Vectors Brazil Small Cap ETF (NYSEARCA:BRF).
This actually isn’t just your typical international ETF. What’s unique about the Market Vectors Brazil Small Cap ETF (NYSEARCA:BRF) is that it gives investors the opportunity to take advantage of rapidly growing small-cap companies in an emerging-market economy. This can be particularly advantageous if the U.S. and other developed countries are growing slower because Brazil is capable of growing independently of the rest of the world.
Another important factor here is the funds distribution. As my Foolish colleague Dan Caplinger points out, nearly half of this ETF’s holdings are in consumer goods.The allure of some consumer goods is that they’re often price-inelastic and stay in demand regardless of whether the economy is growing or shrinking.
With an annual expense ratio of 0.59% and a yield of 1.52%, this ETF gives investors plenty of opportunity to participate in Brazil’s growth while being exposed to a reasonably small amount of risk.
Foolish roundup
This week’s theme was dual in nature. First, that the Brazilian economy offers quite a few bargain-basement opportunities that could grow even if the U.S. and Europe are struggling; and second, that U.S. natural gas isn’t getting nearly enough respect, which could make ONEOK, Inc. (NYSE:OKE) a surprisingly profitable company moving forward.
I’m so confident that these three names will bounce off their lows that I’m going to make a CAPScall of outperform on each one.
The article 3 Stocks Near 52-Week Lows Worth Buying originally appeared on Fool.com is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool recommends ONEOK and ONEOK Partners.
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