Contrasting Summit Midstream Partners (NYSE:SMC) and Diversified Energy (NYSE:DEC)

Summit Midstream Partners (NYSE:SMC) and Diversified Energy (NYSE:DEC) are both small-cap energy companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Valuation and Earnings

This table compares Summit Midstream Partners and Diversified Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream Partners	$562.09 million	1.11	$8.93 million	($0.40)	-76.79
Diversified Energy	$1.83 billion	0.54	$341.11 million	$2.79	4.97

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

Risk & Volatility

Summit Midstream Partners has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Diversified Energy has a beta of -0.32, meaning that its share price is 132% less volatile than the S&P 500.

Insider & Institutional Ownership

43.0% of Summit Midstream Partners shares are owned by institutional investors. Comparatively, 26.5% of Diversified Energy shares are owned by institutional investors. 43.0% of Summit Midstream Partners shares are owned by company insiders. Comparatively, 2.9% of Diversified Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Summit Midstream Partners	1.61%	1.17%	0.41%
Diversified Energy	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent recommendations for Summit Midstream Partners and Diversified Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream Partners	0	2	2	0	2.50
Diversified Energy	1	1	6	2	2.90

Summit Midstream Partners currently has a consensus target price of $43.00, indicating a potential upside of 40.00%. Diversified Energy has a consensus target price of $22.00, indicating a potential upside of 58.58%. Given Diversified Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Diversified Energy is more favorable than Summit Midstream Partners.

About Summit Midstream Partners

Summit Midstream Corporation, formerly Summit Midstream Partners, is a midstream energy company that provides infrastructure and services to natural gas and crude oil producers. Its operations include gathering, compressing, treating and processing natural gas, as well as gathering and handling crude oil and produced water. The company’s assets serve production areas including the Williston Basin in North Dakota, the Piceance and Denver-Julesburg basins in Colorado, the Permian Basin in Texas and the Barnett Shale in Texas.

About Diversified Energy

Diversified Energy Company plc is an independent energy company focused on acquiring, operating and managing established natural gas and oil assets. Its production includes natural gas, natural gas liquids and oil. The company also owns and operates infrastructure used to gather and transport production, including pipelines and compression facilities. Its approach emphasizes maintaining and improving mature wells over their operating lives, as well as managing emissions and eventual well retirement.