Summit Midstream Partners (SMLP) versus Tallgrass Energy Partners (TEP) Critical Analysis
Summit Midstream Partners (NYSE: SMLP) and Tallgrass Energy Partners (NYSE:TEP) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.
Volatility & Risk
Summit Midstream Partners has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, Tallgrass Energy Partners has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Summit Midstream Partners and Tallgrass Energy Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners||1||2||3||0||2.33|
|Tallgrass Energy Partners||0||4||5||0||2.56|
Summit Midstream Partners currently has a consensus target price of $26.20, indicating a potential upside of 32.66%. Tallgrass Energy Partners has a consensus target price of $59.75, indicating a potential upside of 34.97%. Given Tallgrass Energy Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Tallgrass Energy Partners is more favorable than Summit Midstream Partners.
Earnings & Valuation
This table compares Summit Midstream Partners and Tallgrass Energy Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Midstream Partners||$402.36 million||3.66||-$40.91 million||$1.46||13.53|
|Tallgrass Energy Partners||$605.12 million||5.36||$263.52 million||$3.74||11.84|
Tallgrass Energy Partners has higher revenue and earnings than Summit Midstream Partners. Tallgrass Energy 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.
Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 11.6%. Tallgrass Energy Partners pays an annual dividend of $3.70 per share and has a dividend yield of 8.4%. Summit Midstream Partners pays out 157.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy Partners pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Midstream Partners has raised its dividend for 3 consecutive years and Tallgrass Energy Partners has raised its dividend for 3 consecutive years.
This table compares Summit Midstream Partners and Tallgrass Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Summit Midstream Partners||24.14%||11.61%||4.31%|
|Tallgrass Energy Partners||64.13%||27.58%||11.52%|
Insider and Institutional Ownership
48.8% of Summit Midstream Partners shares are held by institutional investors. Comparatively, 62.1% of Tallgrass Energy Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Tallgrass Energy Partners beats Summit Midstream Partners on 13 of the 15 factors compared between the two stocks.
About Summit Midstream Partners
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.
About Tallgrass Energy Partners
Tallgrass Energy Partners, LP owns, operates, acquires and develops midstream energy assets in North America. The Company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics and Processing & Logistics. The Crude Oil Transportation & Logistics segment includes the ownership and operation of a Federal Energy Regulatory Commission (FERC) crude oil pipeline system, and crude oil storage and terminaling facilities. The Natural Gas Transportation & Logistics segment is engaged in the ownership and operation of FERC regulated interstate natural gas pipelines and integrated natural gas storage facilities. The Processing & Logistics segment is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities; the provision of water business services primarily to the oil and gas exploration and production industry, and the transportation of natural gas liquids (NGLs).
Receive News & Ratings for Summit Midstream Partners LP Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Summit Midstream Partners LP and related companies with MarketBeat.com's FREE daily email newsletter.