Critical Comparison: TC Energy (NYSE:TRP) versus Summit Midstream (NYSE:SMC)

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Summit Midstream and TC Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
TC Energy	2	2	5	0	2.33

TC Energy has a consensus target price of $55.67, indicating a potential upside of 17.02%. Given TC Energy’s stronger consensus rating and higher possible upside, analysts clearly believe TC Energy is more favorable than Summit Midstream.

Profitability

This table compares Summit Midstream and TC Energy’s 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%
TC Energy	31.15%	12.92%	3.74%

Valuation and Earnings

This table compares Summit Midstream and TC Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$458.90 million	0.99	-$38.95 million	($12.81)	-3.34
TC Energy	$16.65 billion	2.97	$2.16 billion	$3.61	13.18

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

Risk & Volatility

Summit Midstream has a beta of 2.37, suggesting that its share price is 137% more volatile than the S&P 500. Comparatively, TC Energy has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

43.0% of Summit Midstream shares are owned by institutional investors. Comparatively, 83.1% of TC Energy shares are owned by institutional investors. 5.3% of Summit Midstream shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

TC Energy beats Summit Midstream on 12 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 TC Energy

TC Energy Corporation operates as an energy infrastructure company in North America. It operates through five segments: Canadian Natural Gas Pipelines; U.S. Natural Gas Pipelines; Mexico Natural Gas Pipelines; Liquids Pipelines; and Power and Energy Solutions. The company builds and operates a network of 93,600 kilometers of natural gas pipelines, which transports natural gas from supply basins to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, LNG export terminals, and other businesses. It also has regulated natural gas storage facilities with a total working gas capacity of 532 billion cubic feet. In addition, it has approximately 4,900 kilometers of liquids pipeline system that connects Alberta crude oil pipeline to refining markets in Illinois, Oklahoma, Texas, and the United States Gulf Coast. Further, the company owns or has interests in power generation facilities with approximately 4,600 megawatts; and owns and operates approximately 118 billion cubic feet of non-regulated natural gas storage facilities in in Alberta, Ontario, Québec, and New Brunswick. The company was formerly known as TransCanada Corporation and changed its name to TC Energy Corporation in May 2019. TC Energy Corporation was founded in 1951 and is headquartered in Calgary, Canada.