Summit Midstream (NYSE:SMC) versus Energy Transfer (NYSE:ET) Critical Comparison

Summit Midstream (NYSE:SMC) and Energy Transfer (NYSE:ET) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent recommendations for Summit Midstream and Energy Transfer, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
Energy Transfer	0	1	10	0	2.91

Energy Transfer has a consensus target price of $21.18, indicating a potential upside of 6.00%. Given Energy Transfer’s stronger consensus rating and higher possible upside, analysts plainly believe Energy Transfer is more favorable than Summit Midstream.

Earnings and Valuation

This table compares Summit Midstream and Energy Transfer”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$449.92 million	1.04	-$38.95 million	($12.81)	-3.44
Energy Transfer	$78.59 billion	0.87	$3.47 billion	$1.36	14.69

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

Profitability

This table compares Summit Midstream and Energy Transfer’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Midstream	-23.01%	0.71%	0.22%
Energy Transfer	5.90%	12.38%	4.16%

Volatility and Risk

Summit Midstream has a beta of 2.37, meaning that its share price is 137% more volatile than the S&P 500. Comparatively, Energy Transfer has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.

Insider & Institutional Ownership

43.0% of Summit Midstream shares are held by institutional investors. Comparatively, 38.2% of Energy Transfer shares are held by institutional investors. 5.3% of Summit Midstream shares are held by company insiders. Comparatively, 3.3% of Energy Transfer shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Energy Transfer beats Summit Midstream on 10 of the 14 factors compared between the two stocks.

About Summit Midstream

Summit Midstream Corporation focuses on owning, developing, and operating midstream energy infrastructure assets primarily shale formations in the continental United States. It operates natural gas, crude oil, and produced water gathering systems in four unconventional resource basins, including the Williston Basin in North Dakota, which includes the Bakken and Three Forks shale formations; the Denver-Julesburg Basin that consists of the Niobrara and Codell shale formations in Colorado and Wyoming; the Fort Worth Basin in Texas, which comprises the Barnett Shale formation; and the Piceance Basin in Colorado, which includes the Mesaverde formation, as well as the emerging Mancos and Niobrara Shale formations. It serves natural gas and crude oil producers. Summit Midstream Corporation was founded in 2012 and is based in Houston, Texas.

About Energy Transfer

Energy Transfer LP provides energy-related services. The company owns and operates natural gas transportation pipeline, and natural gas storage facilities in Texas and Oklahoma; and approximately 20,090 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. In addition, the company owns and operates natural gas gathering pipelines, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, Montana, North Dakota, Wyoming, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and transports and supplies water to natural gas producer in Pennsylvania. Further, it owns 5,700 miles of natural gas liquid (NGL) pipeline; NGL fractionation facilities; NGL storage facilities; and other NGL storage assets and terminal. Additionally, the company provides crude oil transportation, terminalling, acquisition, and marketing activities; owns and operates approximately 14,500 miles of crude oil trunk and gathering pipelines in the Southwest, Midcontinent, and Midwest United States; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum products. It also offers natural gas compression services; carbon dioxide and hydrogen sulfide removal services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 1996 and is headquartered in Dallas, Texas.