ONEOK's (NYSE:OKE) stock has been red-hot over the past year, rising nearly 15% while most of its pipeline peers are down significantly. Because of that, it trades at a substantial premium to those rivals. One reason for its outperformance and premium valuation is the company's view that 2018 will be a big year, with it projecting increases of more than 15% for earnings and nearly 25% for cash flow from 2017's level.

Investors will get their first glimpse of whether the company is on track with that outlook when it reports first-quarter results this week. If those numbers come in as well as the company expects, shares could continue their upward momentum.

Pipelines at sunset.

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Keep an eye on these numbers

ONEOK expects to produce $2.215 billion to $2.415 billion of adjusted EBITDA this year along with $1.615 billion to $1.815 billion of distributable cash flow. One of the biggest contributors to that forecast is the view that the company will produce an additional 70,000 barrels of ethane per day this year due to higher prices. This anticipated incremental volume alone would add $100 million in EBITDA. Because of the importance of this projection, investors should keep a close eye on what the company has to say about its ability to hit that target.

Another thing to watch is the volume of natural gas the company gathers and processes this year. ONEOK currently expects volume to rise 20%, which would fuel a 25% increase in EBITDA within its natural gas gathering and processing segment. The company anticipates much of this growth coming from its assets in the STACK and SCOOP shale plays of Oklahoma, where it finished a new gas processing plant at the end of last year and expects to complete another one in 2018. Given this forecast and its importance to ONEOK's growth in 2018, investors should see if those volumes have started flowing in as expected.

See if there is any more growth coming down the pipeline

While rising volumes across many of ONEOK's legacy systems will be the main fuel driving earnings and cash flow higher this year, it's not the only factor. Another is the expansion projects the company completed last year, as well as those it expects to finish in 2018. Those projects include a $200 million expansion of the West Texas LPG joint venture, a $130 million capacity increase of its Sterling III pipeline, and a $160 million expansion of a natural gas processing plant. As these projects come on line later this year, they'll provide some incremental cash flow.

Those are part of the more than $4 billion in capital projects that ONEOK has secured over the past year to fuel growth in 2018 and beyond. Given the sheer volume of projects the company has already announced, it seems less likely that it will have any more to unveil during the first quarter. However, the company might provide some insight on those in late stages of development. If the company can secure additional projects, it would help further increase the visibility of the company's dividend growth plan, which currently has it on pace to grow the payout at a 9% to 11% annual rate through 2021.

Looking for confirmation

A strong first quarter showing by ONEOK this week would help affirm that the company is on pace to deliver fast-paced earnings and cash flow growth in 2018. That would help increase investor confidence that the company can achieve its dividend growth plan, which is what income-seeking investors want to see. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.