Critical Analysis: EOG Resources (NYSE:EOG) & Summit Midstream Partners (NYSE:SMC)

EOG Resources (NYSE:EOG) and Summit Midstream Partners (NYSE:SMC) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Earnings and Valuation

This table compares EOG Resources and Summit Midstream Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EOG Resources	$26.64 billion	3.19	$4.98 billion	$12.85	12.61
Summit Midstream Partners	$562.09 million	1.11	$8.93 million	($1.11)	-27.65

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for EOG Resources and Summit Midstream Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EOG Resources	0	17	9	2	2.46
Summit Midstream Partners	0	1	2	1	3.00

EOG Resources presently has a consensus target price of $161.24, suggesting a potential downside of 0.48%. Summit Midstream Partners has a consensus target price of $43.00, suggesting a potential upside of 40.12%. Given Summit Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Summit Midstream Partners is more favorable than EOG Resources.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
EOG Resources	25.44%	23.44%	13.58%
Summit Midstream Partners	-0.06%	-0.04%	-0.01%

Risk and Volatility

EOG Resources has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Summit Midstream Partners has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

89.9% of EOG Resources shares are owned by institutional investors. Comparatively, 43.0% of Summit Midstream Partners shares are owned by institutional investors. 0.1% of EOG Resources shares are owned by insiders. Comparatively, 43.0% of Summit Midstream Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

EOG Resources beats Summit Midstream Partners on 11 of the 15 factors compared between the two stocks.

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

About Summit Midstream Partners

Summit Midstream Corporation focuses on owning, developing, and operating midstream energy infrastructure assets primarily shale formations in the continental United States. It operates natural gas, crude oil, and produced water gathering systems in four unconventional resource basins, including the Williston Basin in North Dakota, which includes the Bakken and Three Forks shale formations; the Denver-Julesburg Basin that consists of the Niobrara and Codell shale formations in Colorado and Wyoming; the Fort Worth Basin in Texas, which comprises the Barnett Shale formation; and the Piceance Basin in Colorado, which includes the Mesaverde formation, as well as the emerging Mancos and Niobrara Shale formations. It serves natural gas and crude oil producers. Summit Midstream Corporation was founded in 2012 and is based in Houston, Texas.