USA Compression Partners (NYSE: USAC) and Summit Midstream Partners (NYSE:SMLP) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.
Insider & Institutional Ownership
64.4% of USA Compression Partners shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Volatility and Risk
USA Compression Partners has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Summit Midstream Partners has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500.
USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 12.4%. Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 14.8%. USA Compression Partners pays out 1,312.5% 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. Summit Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares USA Compression Partners and Summit Midstream Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|USA Compression Partners||$280.22 million||5.42||$11.44 million||$0.16||105.63|
|Summit Midstream Partners||$488.74 million||2.38||$85.68 million||$1.64||9.48|
Summit Midstream Partners has higher revenue and earnings than USA Compression Partners. Summit Midstream Partners 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.
This table compares USA Compression Partners and Summit Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|USA Compression Partners||-1.88%||2.54%||0.98%|
|Summit Midstream Partners||17.59%||13.23%||4.88%|
This is a summary of recent ratings and price targets for USA Compression Partners and Summit Midstream Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|USA Compression Partners||0||1||3||0||2.75|
|Summit Midstream Partners||1||4||4||0||2.33|
USA Compression Partners presently has a consensus price target of $20.75, indicating a potential upside of 22.78%. Summit Midstream Partners has a consensus price target of $19.25, indicating a potential upside of 23.79%. Given Summit Midstream Partners’ higher probable upside, analysts plainly believe Summit Midstream Partners is more favorable than USA Compression Partners.
Summit Midstream Partners beats USA Compression Partners on 11 of the 15 factors compared between the two stocks.
USA Compression Partners Company Profile
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.
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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