Summit Midstream Partners (NYSE: SMLP) and Transportadora de Gas del Sur (NYSE:TGS) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.
Institutional & Insider Ownership
9.3% of Transportadora de Gas del Sur shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Summit Midstream Partners and Transportadora de Gas del Sur’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Summit Midstream Partners||17.59%||13.23%||4.88%|
|Transportadora de Gas del Sur||25.94%||72.93%||28.68%|
Earnings and Valuation
This table compares Summit Midstream Partners and Transportadora de Gas del Sur’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Midstream Partners||$488.74 million||2.45||$85.68 million||$1.64||9.76|
|Transportadora de Gas del Sur||$742.27 million||3.46||$168.71 million||$1.07||15.08|
Transportadora de Gas del Sur has higher revenue and earnings than Summit Midstream Partners. Summit Midstream Partners is trading at a lower price-to-earnings ratio than Transportadora de Gas del Sur, indicating that it is currently the more affordable of the two stocks.
Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 14.4%. Transportadora de Gas del Sur does not pay a dividend. 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.
Risk and Volatility
Summit Midstream Partners has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500. Comparatively, Transportadora de Gas del Sur has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Summit Midstream Partners and Transportadora de Gas del Sur, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners||1||4||4||0||2.33|
|Transportadora de Gas del Sur||1||1||0||0||1.50|
Summit Midstream Partners presently has a consensus price target of $19.25, suggesting a potential upside of 20.31%. Transportadora de Gas del Sur has a consensus price target of $25.00, suggesting a potential upside of 54.89%. Given Transportadora de Gas del Sur’s higher possible upside, analysts plainly believe Transportadora de Gas del Sur is more favorable than Summit Midstream Partners.
Transportadora de Gas del Sur beats Summit Midstream Partners on 10 of the 15 factors compared between the two stocks.
About Summit Midstream Partners
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.
About Transportadora de Gas del Sur
Transportadora de Gas del Sur S.A. provides natural gas transportation and distribution services in Argentina. The company operates through four segments: Natural Gas Transportation, Liquids Production and Commercialization, Other Services, and Telecommunications. The Natural Gas Transportation segment transports natural gas through 5,706 miles of pipeline system to distribution companies, power plants, and industrial customers. As of December 31, 2017, it served 6.1 million residential, commercial, industrial, and electric power generation end-users. It also provides operation and maintenance services for the natural gas transportation facilities. The Liquids Production and Commercialization segment produces and commercializes natural gas liquids, such as ethane, LPG, natural gasoline, propane, and butane in Argentina and internationally. The Other Services segment offers midstream services, including natural gas treatment, separation, and removal of impurities from the natural gas stream, as well as natural gas compression. It also provides services related to pipeline and compression plant construction, operation, and maintenance; and generates steam for electricity production. The Telecommunications segment provides telecommunication services for telecommunication operators and corporate customers. Its telecommunication network includes a microwave digital network with synchronous digital hierarchy technology and a dark fiber optic network. The company was founded in 1992 and is headquartered in Buenos Aires, Argentina. Transportadora de Gas del Sur S.A. is a subsidiary of Compañía de Inversiones de Energía S.A.
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