Critical Contrast: Enable Midstream Partners (ENBL) & Summit Midstream Partners (SMLP)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Enable Midstream Partners 13.84% 6.28% 3.87%
Summit Midstream Partners -2.92% 11.70% 4.00%

Risk & Volatility

Enable Midstream Partners has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Summit Midstream Partners has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Enable Midstream Partners and Summit Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enable Midstream Partners 0 5 2 0 2.29
Summit Midstream Partners 1 4 5 0 2.40

Enable Midstream Partners currently has a consensus target price of $18.29, indicating a potential upside of 21.99%. Summit Midstream Partners has a consensus target price of $18.00, indicating a potential upside of 42.97%. Given Summit Midstream Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Summit Midstream Partners is more favorable than Enable Midstream Partners.

Dividends

Enable Midstream Partners pays an annual dividend of $1.27 per share and has a dividend yield of 8.5%. Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 18.3%. Enable Midstream Partners pays out 138.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Insider and Institutional Ownership

19.4% of Enable Midstream Partners shares are owned by institutional investors. Comparatively, 42.4% of Summit Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Enable Midstream Partners and Summit Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enable Midstream Partners $2.80 billion 2.32 $436.00 million $0.92 16.29
Summit Midstream Partners $488.74 million 1.93 $85.68 million $1.64 7.68

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

Summary

Summit Midstream Partners beats Enable Midstream Partners on 9 of the 15 factors compared between the two stocks.

Enable Midstream Partners Company Profile

Enable Midstream Partners, LP owns, operates, and develops midstream energy infrastructure assets in the United States. The company operates in two segments, Gathering and Processing; and Transportation and Storage. The Gathering and Processing segment provides natural gas gathering, processing, and fractionation services in the Anadarko, Arkoma, and Ark-La-Tex basins, as well as crude oil gathering services in the Bakken Shale formation of the Williston Basin for its producer customers. The Transportation and Storage segment offers interstate and intrastate natural gas pipeline transportation and storage services to natural gas producers, utilities, and industrial customers. The company's natural gas gathering and processing assets are located in Oklahoma, Texas, Arkansas, and Louisiana; crude oil gathering assets are located in North Dakota; and natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois, in Oklahoma, and from Louisiana to Alabama. As of December 31, 2017, its portfolio of midstream energy infrastructure assets included approximately 13,300 miles of gathering pipelines; 15 processing plants with 2.6 billion cubic feet per day of processing capacity; approximately 7,800 miles of interstate pipelines; approximately 2,200 miles of intrastate pipelines; and 8 natural gas storage facilities with 86.0 billion cubic feet of storage capacity. The company is based in Oklahoma City, Oklahoma. Enable Midstream Partners, LP is a subsidiary of CenterPoint Energy, Inc.

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.

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