Head-To-Head Review: Summit Midstream (NYSE:SMC) versus Western Midstream Partners (NYSE:WES)

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

Risk & Volatility

Summit Midstream has a beta of 2.28, suggesting that its stock price is 128% more volatile than the S&P 500. Comparatively, Western Midstream Partners has a beta of 2.88, suggesting that its stock price is 188% more volatile than the S&P 500.

Institutional and Insider Ownership

43.0% of Summit Midstream shares are held by institutional investors. Comparatively, 84.8% of Western Midstream Partners shares are held by institutional investors. 5.3% of Summit Midstream shares are held by company insiders. Comparatively, 0.0% of Western Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Summit Midstream and Western Midstream Partners’ 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%
Western Midstream Partners	42.99%	46.02%	12.18%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Summit Midstream and Western Midstream Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
Western Midstream Partners	2	5	1	0	1.88

Western Midstream Partners has a consensus target price of $38.43, indicating a potential downside of 7.38%. Given Western Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Western Midstream Partners is more favorable than Summit Midstream.

Earnings & Valuation

This table compares Summit Midstream and Western Midstream Partners”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$429.62 million	1.49	-$38.95 million	($13.09)	-2.62
Western Midstream Partners	$3.61 billion	4.39	$1.02 billion	$4.03	10.30

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

Summary

Western Midstream Partners beats Summit Midstream on 13 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 Western Midstream Partners

Western Midstream Partners, LP, together with its subsidiaries, operates as a midstream energy company primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. The company also buys and sells natural gas, NGLs, and condensate. It operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.