Summit Midstream Partners, (NYSE: SMLP) and Frontline (NYSE:FRO) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Summit Midstream Partners, has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500. Comparatively, Frontline has a beta of 2.04, suggesting that its stock price is 104% 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 10.7%. Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 10.4%. Summit Midstream Partners, pays out 958.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline has raised its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Summit Midstream Partners, and Frontline’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Summit Midstream Partners, $459.61 million 3.41 $279.66 million $0.24 89.38
Frontline $702.25 million 1.39 $313.91 million $0.20 28.80

Frontline has higher revenue and earnings than Summit Midstream Partners,. Frontline 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.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Midstream Partners, 1 2 3 0 2.33
Frontline 1 2 1 0 2.00

Summit Midstream Partners, currently has a consensus target price of $26.20, indicating a potential upside of 22.14%. Frontline has a consensus target price of $6.00, indicating a potential upside of 4.17%. Given Summit Midstream Partners,’s stronger consensus rating and higher probable upside, equities analysts clearly believe Summit Midstream Partners, is more favorable than Frontline.

Profitability

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

Net Margins Return on Equity Return on Assets
Summit Midstream Partners, 5.78% 3.55% 1.33%
Frontline 4.74% 4.41% 2.15%

Institutional & Insider Ownership

49.8% of Summit Midstream Partners, shares are owned by institutional investors. Comparatively, 12.4% of Frontline shares are owned by institutional investors. 48.1% of Frontline shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Summit Midstream Partners, beats Frontline on 9 of the 17 factors compared between the two stocks.

Summit Midstream Partners, Company Profile

Summit Midstream Partners, LP focuses on developing, owning and operating midstream energy infrastructure assets. The Company’s segments include the Utica Shale, which includes its ownership interest in Ohio Gathering, as well as Summit Utica; the Williston Basin, which includes Bison Midstream, Polar and Divide and Tioga Midstream; the Marcellus Shale, which includes Mountaineer Midstream; the Barnett Shale, which includes DFW Midstream Services LLC (DFW Midstream), and the Piceance Basin /DJ Basins, which includes Grand River and Niobrara G&P. The Company’s assets are located in the producing areas of unconventional resource basins, primarily shale formations, in the continental United States. It provides natural gas gathering, treating and processing services, as well as crude oil and produced water gathering services pursuant to long-term and fee-based agreements with its customers.

Frontline Company Profile

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

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