Head to Head Review: EnLink Midstream (NYSE:ENLC) and Summit Midstream (NYSE:SMC)

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

Insider and Institutional Ownership

43.0% of Summit Midstream shares are held by institutional investors. Comparatively, 45.9% of EnLink Midstream shares are held by institutional investors. 5.3% of Summit Midstream shares are held by company insiders. Comparatively, 0.8% of EnLink Midstream shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Summit Midstream has a beta of 2.37, suggesting that its stock price is 137% more volatile than the S&P 500. Comparatively, EnLink Midstream has a beta of 2.43, suggesting that its stock price is 143% more volatile than the S&P 500.

Profitability

This table compares Summit Midstream and EnLink Midstream’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%
EnLink Midstream	1.96%	9.51%	2.76%

Valuation and Earnings

This table compares Summit Midstream and EnLink Midstream”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	0.94	-$38.95 million	($12.81)	-3.18
EnLink Midstream	$6.65 billion	0.97	$206.20 million	$0.21	67.40

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Summit Midstream and EnLink Midstream, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
EnLink Midstream	0	10	2	1	2.31

EnLink Midstream has a consensus price target of $15.40, indicating a potential upside of 8.80%. Given EnLink Midstream’s stronger consensus rating and higher possible upside, analysts plainly believe EnLink Midstream is more favorable than Summit Midstream.

Summary

EnLink Midstream beats Summit Midstream on 14 of the 15 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 EnLink Midstream

EnLink Midstream, LLC provides midstream energy services in the United States. The company operates through Permian, Louisiana, Oklahoma, North Texas, and Corporate segments. It is involved in gathering, compressing, treating, processing, transporting, storing, and selling natural gas; fractionating, transporting, storing, and selling natural gas liquids; and gathering, transporting, stabilizing, storing, trans-loading, and selling crude oil and condensate, as well as providing brine disposal services. In addition, the company's midstream energy asset network includes natural gas processing plants; fractionators; barge and rail terminals; product storage facilities; and brine disposal wells. EnLink Midstream, LLC was incorporated in 2013 and is based in Dallas, Texas.