Financial Analysis: Antero Midstream (NYSE:AM) vs. Summit Midstream (NYSE:SMC)

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

Risk and Volatility

Summit Midstream has a beta of 2.37, meaning that its share price is 137% more volatile than the S&P 500. Comparatively, Antero Midstream has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500.

Institutional & Insider Ownership

43.0% of Summit Midstream shares are held by institutional investors. Comparatively, 54.0% of Antero Midstream shares are held by institutional investors. 5.3% of Summit Midstream shares are held by company insiders. Comparatively, 0.6% of Antero Midstream shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$449.92 million	0.89	-$38.95 million	($12.81)	-2.95
Antero Midstream	$1.15 billion	6.48	$371.79 million	$0.81	19.10

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

Analyst Ratings

This is a summary of recent ratings and target prices for Summit Midstream and Antero Midstream, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
Antero Midstream	1	2	0	0	1.67

Antero Midstream has a consensus price target of $15.00, indicating a potential downside of 3.04%. Given Antero Midstream’s stronger consensus rating and higher possible upside, analysts plainly believe Antero Midstream is more favorable than Summit Midstream.

Profitability

This table compares Summit Midstream and Antero 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%
Antero Midstream	36.16%	18.91%	7.03%

Summary

Antero Midstream beats Summit Midstream on 11 of the 13 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 Antero Midstream

Antero Midstream Corporation owns, operates, and develops midstream energy assets in the Appalachian Basin. It operates in two segments, Gathering and Processing, and Water Handling. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources' wells in West Virginia and Ohio. The Water Handling segment delivers fresh water from sources, including the Ohio River, local reservoirs, and various regional waterways; uses water handling systems to transport flowback and produced water; and offers pumping stations, water storage, and blending facilities. The company was founded in 2002 and is headquartered in Denver, Colorado.