Critical Comparison: ONEOK (NYSE:OKE) versus Summit Midstream Partners (NYSE:SMC)

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

Institutional and Insider Ownership

69.1% of ONEOK shares are owned by institutional investors. Comparatively, 43.0% of Summit Midstream Partners shares are owned by institutional investors. 0.2% of ONEOK shares are owned by insiders. Comparatively, 37.8% of Summit Midstream Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares ONEOK and Summit Midstream Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEOK	$21.70 billion	2.35	$3.04 billion	$5.12	15.83
Summit Midstream Partners	$429.62 million	1.14	-$113.18 million	($13.09)	-2.01

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ONEOK	12.15%	15.58%	5.42%
Summit Midstream Partners	-26.34%	-1.51%	-0.51%

Risk & Volatility

ONEOK has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Summit Midstream Partners has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for ONEOK and Summit Midstream Partners, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEOK	0	6	8	1	2.67
Summit Midstream Partners	0	0	0	0	0.00

ONEOK currently has a consensus target price of $103.69, indicating a potential upside of 27.90%. Given ONEOK’s stronger consensus rating and higher probable upside, analysts plainly believe ONEOK is more favorable than Summit Midstream Partners.

Summary

ONEOK beats Summit Midstream Partners on 13 of the 15 factors compared between the two stocks.

About ONEOK

ONEOK, Inc. engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions; and provides midstream services to producers of NGLs. It also owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Kansas, Nebraska, Iowa, and Illinois; NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois, and Indiana; transports refined petroleum products, including unleaded gasoline and diesel; and owns and operates truck- and rail-loading, and -unloading facilities connected to NGL fractionation, storage, and pipeline assets. In addition, the company transports and stores natural gas through regulated interstate and intrastate natural gas transmission pipelines, and natural gas storage facilities. Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space and rail cars. Additionally, the company transports, stores, and distributes refined products, NGLs, and crude oil, as well as conducts commodity-related activities, including liquids blending and marketing activities. It serves integrated and independent exploration and production companies; other NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; utilities; industrial companies; natural gasoline distributors; propane distributors; municipalities; ethanol producers; petrochemical, refining, and marketing companies; and heating fuel users, refineries, and exporters. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.

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.