Reviewing Summit Midstream (NYSE:SMC) and USA Compression Partners (NYSE:USAC)

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

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, USA Compression Partners has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Insider & Institutional Ownership

43.0% of Summit Midstream shares are owned by institutional investors. Comparatively, 47.8% of USA Compression Partners shares are owned by institutional investors. 5.3% of Summit Midstream shares are owned by company 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.

Earnings & Valuation

This table compares Summit Midstream and USA Compression Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$449.92 million	0.98	-$38.95 million	($12.81)	-3.24
USA Compression Partners	$950.45 million	3.19	$99.57 million	$0.73	35.35

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Summit Midstream and USA Compression Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
USA Compression Partners	0	3	1	0	2.25

USA Compression Partners has a consensus target price of $27.50, indicating a potential upside of 6.57%. Given USA Compression Partners’ stronger consensus rating and higher possible upside, analysts plainly believe USA Compression Partners is more favorable than Summit Midstream.

Profitability

This table compares Summit Midstream and USA Compression Partners’ 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%
USA Compression Partners	10.48%	-62.46%	3.35%

Summary

USA Compression Partners beats Summit Midstream on 11 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 USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.