Contrasting Western Midstream Partners (NYSE:WES) & Summit Midstream (NYSE:SMC)

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

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 Ratings

This is a breakdown of recent ratings 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	4	1	0	1.86

Western Midstream Partners has a consensus target price of $38.43, indicating a potential upside of 5.92%. Given Western Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Western Midstream Partners is more favorable than Summit Midstream.

Earnings and 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	1.22	-$38.95 million	($13.09)	-2.15
Western Midstream Partners	$3.61 billion	3.84	$1.02 billion	$4.03	9.00

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.

Institutional & Insider Ownership

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

Risk & Volatility

Summit Midstream has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500. Comparatively, Western Midstream Partners has a beta of 2.4, indicating that its stock price is 140% more volatile than the S&P 500.

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.