Summit Midstream Partners (NYSE: AROC) and Archrock (NYSE:AROC) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Dividends

Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 13.9%. Archrock pays an annual dividend of $0.53 per share and has a dividend yield of 4.3%. Summit Midstream Partners pays out 140.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Archrock pays out -265.0% of its earnings in the form of a dividend.

Risk & Volatility

Summit Midstream Partners has a beta of 1.95, meaning that its share price is 95% more volatile than the S&P 500. Comparatively, Archrock has a beta of 2.84, meaning that its share price is 184% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Summit Midstream Partners 4.33% 7.98% 2.85%
Archrock 4.19% 0.45% 0.14%

Valuation & Earnings

This table compares Summit Midstream Partners and Archrock’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Midstream Partners $488.74 million 2.53 $85.68 million $1.64 10.06
Archrock $794.66 million 2.03 $18.95 million ($0.20) -62.25

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

Analyst Recommendations

This is a summary of current ratings and price targets for Summit Midstream Partners and Archrock, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Midstream Partners 1 4 4 0 2.33
Archrock 0 2 5 0 2.71

Summit Midstream Partners presently has a consensus price target of $19.00, indicating a potential upside of 15.15%. Archrock has a consensus price target of $14.63, indicating a potential upside of 17.47%. Given Archrock’s stronger consensus rating and higher probable upside, analysts clearly believe Archrock is more favorable than Summit Midstream Partners.

Institutional & Insider Ownership

43.9% of Summit Midstream Partners shares are owned by institutional investors. Comparatively, 88.9% of Archrock shares are owned by institutional investors. 2.5% of Archrock shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summit Midstream Partners Company Profile

Summit Midstream Partners, LP focuses on owning, developing, and operating midstream energy infrastructure assets primarily shale formations in the continental United States. The company provides natural gas gathering, treating, and processing services, as well as crude oil and produced water gathering services. It operates in five unconventional resource basins, including the Appalachian Basin, which comprises the Utica and Point Pleasant shale formations in southeastern Ohio, and the Marcellus Shale formation in northern West Virginia; the Williston Basin that consists of the Bakken and Three Forks shale formations in northwestern North Dakota; the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; the Piceance Basin that comprises the Mesaverde formation, and the Mancos and Niobrara shale formations in western Colorado and eastern Utah; and the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in northeastern Colorado. The company serves natural gas and crude oil producers. Summit Midstream GP, LLC operates as a general partner of the company. Summit Midstream Partners, LP was founded in 2009 and is headquartered in The Woodlands, Texas.

Archrock Company Profile

Archrock, Inc. engages in the natural gas contract operations services business in the United States. The company provides natural gas compression services to customers in the oil and natural gas industry. It also offers aftermarket services, such as parts and components; and operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

Receive News & Ratings for Summit Midstream Partners Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Summit Midstream Partners and related companies with MarketBeat.com's FREE daily email newsletter.