MeritValue

ONE Gas, Inc.

OGSdata completeness 88%14 fiscal years on file
The thesis, from the filings

ONE Gas, Inc. earns about 4% on invested capital, but has diluted owners by 13% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $38.16 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.81B1$2.58B1———
Net income$206.4M2$221.7M3$231.2M4$222.9M4$264.2M4
Operating cash flow−$1.54B5$1.57B6$939.5M7$368.4M7$578.8M7
Capital expenditure$495.2M8$609.5M9$666.6M10$703.2M10$707.2M10
Free cash flow (derived)−$2.03B5$961.4M6$272.9M7−$334.8M7−$128.4M7
Total debt$7.88B11$5.91B12$5.98B13$5.71B14$5.98B14
Cash & equivalents$8.85M15$9.68M16$18.8M17$58M18$10.6M18
Diluted shares53.7M54.3M55.9M57.0M60.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$568.49
your share of equity
Profit it earned you last year
$43.66
Free cash flow it threw off
−$21.22
Debt you’d be carrying
$988.12

10 shares is a claim on $568.49 of net worth that earned you $43.66 and generated −$21.22 of cash last year, against $988.12 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
4% avg · 5y
FY21 3%FY22 3%FY23 4%FY24 4%FY25 4%

It earned an average 4% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+13% shares · 5y

Share count is up 13% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 24% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$38.16
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$222.9M
  • growthAssumed0.0%
Graham Number
$74.76
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001587732-23-000015 (Revenues)
  2. 10-K · period ending 2021-12-31 · accession 0001587732-24-000013 (NetIncomeLoss)
  3. 10-K · period ending 2022-12-31 · accession 0001587732-25-000013 (NetIncomeLoss)
  4. 10-K · period ending 2023-12-31 · accession 0001587732-26-000009 (NetIncomeLoss)
  5. 10-K · period ending 2021-12-31 · accession 0001587732-24-000013 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2022-12-31 · accession 0001587732-25-000013 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2023-12-31 · accession 0001587732-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2021-12-31 · accession 0001587732-24-000013 (PaymentsToAcquirePropertyPlantAndEquipment)
  9. 10-K · period ending 2022-12-31 · accession 0001587732-25-000013 (PaymentsToAcquirePropertyPlantAndEquipment)
  10. 10-K · period ending 2023-12-31 · accession 0001587732-26-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2021-12-31 · accession 0001587732-23-000015 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2022-12-31 · accession 0001587732-24-000013 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2023-12-31 · accession 0001587732-25-000013 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-12-31 · accession 0001587732-26-000009 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2021-12-31 · accession 0001587732-23-000015 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0001587732-24-000013 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0001587732-25-000013 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2024-12-31 · accession 0001587732-26-000009 (CashAndCashEquivalentsAtCarryingValue)