Summit Midstream Partners (NYSE: SMLP) and ONEOK (NYSE:OKE) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.
Risk & Volatility
Summit Midstream Partners has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500. Comparatively, ONEOK has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Summit Midstream Partners and ONEOK, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners||1||1||4||0||2.50|
Summit Midstream Partners currently has a consensus price target of $25.00, suggesting a potential upside of 13.38%. ONEOK has a consensus price target of $58.42, suggesting a potential upside of 3.94%. Given Summit Midstream Partners’ stronger consensus rating and higher probable upside, research analysts clearly believe Summit Midstream Partners is more favorable than ONEOK.
This table compares Summit Midstream Partners and ONEOK’s 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%|
Earnings & Valuation
This table compares Summit Midstream Partners and ONEOK’s 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||4.09||-$40.91 million||$1.46||15.10|
|ONEOK||$8.92 billion||2.42||$352.03 million||$1.60||35.13|
ONEOK has higher revenue and earnings than Summit Midstream Partners. Summit Midstream Partners is trading at a lower price-to-earnings ratio than ONEOK, 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 10.4%. ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.3%. 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. ONEOK pays out 186.3% 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 14 consecutive years and ONEOK has raised its dividend for 4 consecutive years. Summit Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
48.8% of Summit Midstream Partners shares are held by institutional investors. Comparatively, 70.9% of ONEOK shares are held by institutional investors. 1.0% of ONEOK shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summit Midstream Partners beats ONEOK on 10 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.
ONEOK Company Profile
ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.
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