Contrasting Summit Midstream Partners (SMLP) & EQT Midstream Partners (EQM)

Summit Midstream Partners (NYSE:SMLP) and EQT Midstream Partners (NYSE:EQM) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Summit Midstream Partners and EQT Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Midstream Partners 1 4 5 0 2.40
EQT Midstream Partners 0 5 9 0 2.64

Summit Midstream Partners presently has a consensus target price of $18.50, indicating a potential upside of 14.76%. EQT Midstream Partners has a consensus target price of $61.92, indicating a potential upside of 38.31%. Given EQT Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe EQT Midstream Partners is more favorable than Summit Midstream Partners.

Profitability

This table compares Summit Midstream Partners and EQT Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Midstream Partners 4.33% 7.98% 2.85%
EQT Midstream Partners 60.71% 22.30% 11.49%

Insider and Institutional Ownership

43.9% of Summit Midstream Partners shares are owned by institutional investors. Comparatively, 66.2% of EQT Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Summit Midstream Partners and EQT Midstream Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Midstream Partners $488.74 million 2.47 $85.68 million $1.64 9.83
EQT Midstream Partners $834.10 million 4.64 $571.90 million $5.19 8.63

EQT Midstream Partners has higher revenue and earnings than Summit Midstream Partners. EQT Midstream Partners is trading at a lower price-to-earnings ratio than Summit Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Summit Midstream Partners has a beta of 1.96, indicating that its stock price is 96% more volatile than the S&P 500. Comparatively, EQT Midstream Partners has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Dividends

Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 14.3%. EQT Midstream Partners pays an annual dividend of $4.36 per share and has a dividend yield of 9.7%. Summit Midstream Partners pays out 140.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT Midstream Partners pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT Midstream Partners has increased its dividend for 5 consecutive years.

Summary

EQT Midstream Partners beats Summit Midstream Partners on 13 of the 16 factors compared between the two stocks.

Summit Midstream Partners Company Profile

Summit Midstream Partners, LP focuses on owning, developing, and operating midstream energy infrastructure assets primarily shale formations in the continental United States. The company provides natural gas gathering, treating, and processing services, as well as crude oil and produced water gathering services. It operates in five unconventional resource basins, including the Appalachian Basin, which comprises the Utica and Point Pleasant shale formations in southeastern Ohio, and the Marcellus Shale formation in northern West Virginia; the Williston Basin that consists of the Bakken and Three Forks shale formations in northwestern North Dakota; the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; the Piceance Basin that comprises the Mesaverde formation, and the Mancos and Niobrara shale formations in western Colorado and eastern Utah; and the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in northeastern Colorado. The company serves natural gas and crude oil producers. Summit Midstream GP, LLC operates as a general partner of the company. Summit Midstream Partners, LP was founded in 2009 and is headquartered in The Woodlands, Texas.

EQT Midstream Partners Company Profile

EQT Midstream Partners, LP provides natural gas gathering, transmission, and storage services in Pennsylvania, West Virginia, and Ohio. The company owns, operates, acquires, and develops midstream assets in the Appalachian Basin. The company also owned approximately 300 miles of high pressure gathering lines and 1,500 miles of federal energy regulatory commission (FERC) regulated low pressure gathering lines; and approximately 950 miles of FERC regulated interstate pipelines. It serves local distribution companies, marketers, producers, and commercial and industrial users. EQT Midstream Services, LLC serves as the general partner of the company. EQT Midstream Partners, LP is headquartered in Pittsburgh, Pennsylvania.

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