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

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

Analyst Ratings

This is a summary of current ratings and recommmendations for TC Energy and Summit Midstream, as reported by MarketBeat.

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

TC Energy presently has a consensus target price of $56.00, suggesting a potential upside of 18.91%. Given TC Energy’s stronger consensus rating and higher probable upside, research analysts plainly believe TC Energy is more favorable than Summit Midstream.

Profitability

This table compares TC Energy and Summit Midstream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TC Energy	31.15%	12.92%	3.74%
Summit Midstream	-23.01%	0.71%	0.22%

Risk and Volatility

TC Energy has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Summit Midstream has a beta of 2.37, suggesting that its stock price is 137% more volatile than the S&P 500.

Institutional and Insider Ownership

83.1% of TC Energy shares are held by institutional investors. Comparatively, 43.0% of Summit Midstream shares are held by institutional investors. 5.3% of Summit Midstream shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares TC Energy and Summit Midstream”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TC Energy	$11.80 billion	4.15	$2.16 billion	$3.61	13.05
Summit Midstream	$458.90 million	1.00	-$38.95 million	($12.81)	-3.36

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.

Summary

TC Energy beats Summit Midstream on 12 of the 14 factors compared between the two stocks.

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.

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.