National Grid (NYSE: SMLP) and Summit Midstream Partners (NYSE:SMLP) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.
This table compares National Grid and Summit Midstream Partners’ 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%|
National Grid pays an annual dividend of $4.08 per share and has a dividend yield of 7.7%. Summit Midstream Partners pays an annual dividend of $2.30 per share and has a dividend yield of 14.0%. National Grid pays out 103.8% 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.
Volatility & Risk
National Grid has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, Summit Midstream Partners has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for National Grid and Summit Midstream Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners||1||4||4||0||2.33|
Summit Midstream Partners has a consensus target price of $19.00, indicating a potential upside of 15.50%. Given Summit Midstream Partners’ higher possible upside, analysts plainly believe Summit Midstream Partners is more favorable than National Grid.
Valuation and Earnings
This table compares National Grid and Summit Midstream Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|National Grid||$20.22 billion||1.77||$4.71 billion||$3.93||13.57|
|Summit Midstream Partners||$488.74 million||2.52||$85.68 million||$1.64||10.03|
National Grid has higher revenue and earnings than Summit Midstream Partners. Summit Midstream Partners is trading at a lower price-to-earnings ratio than National Grid, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
5.5% of National Grid shares are owned by institutional investors. Comparatively, 43.9% of Summit Midstream Partners shares are owned by institutional investors. 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.
Summit Midstream Partners beats National Grid on 8 of the 14 factors compared between the two stocks.
National Grid Company Profile
National Grid plc transmits and distributes electricity and natural gas. It operates through UK Electricity Transmission, UK Gas Transmission, and US Regulated segments. The UK Electricity Transmission segment owns and operates electricity transmission networks, which comprise approximately 7,200 kilometers of overhead lines; 1,500 kilometers of underground cables; and 346 substations located in England and Wales. It also operates the Scottish networks. The UK Gas Transmission segment owns and operates gas transmission systems that include approximately 7,660 kilometers of high pressure pipes and 24 compressor stations connecting 8 distribution networks in Great Britain. The US Regulated segment owns and operates transmission facilities across upstate New York, Massachusetts, New Hampshire, Rhode Island, and Vermont; and electricity distribution networks in upstate New York, Massachusetts, and Rhode Island. Its assets comprise 14,293 kilometers of overhead lines; 168 kilometers of underground cables; 387 transmission substations; and 740 distribution substations. This segment also engages in owning and operating gas distribution networks in upstate New York, New York City, Long Island, Massachusetts, and Rhode Island. The company is also involved in gas metering, property management, liquefied natural gas (LNG) importation terminal, and LNG operations, as well as the operation of Great Britain-France interconnector. National Grid plc was founded in 1990 and is headquartered in London, the United Kingdom.
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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