Rattler Midstream (NASDAQ:RTLR) and Summit Midstream Partners (NASDAQ:SMLP) Critical Analysis

Summit Midstream Partners (NYSE:SMLP) and Rattler Midstream (NASDAQ:RTLR) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Dividends

Summit Midstream Partners pays an annual dividend of $1.15 per share and has a dividend yield of 21.6%. Rattler Midstream does not pay a dividend. Summit Midstream Partners pays out 1,916.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings for Summit Midstream Partners and Rattler Midstream, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Midstream Partners 2 4 1 0 1.86
Rattler Midstream 0 4 11 0 2.73

Summit Midstream Partners presently has a consensus target price of $10.93, indicating a potential upside of 105.04%. Rattler Midstream has a consensus target price of $22.54, indicating a potential upside of 24.66%. Given Summit Midstream Partners’ higher possible upside, analysts plainly believe Summit Midstream Partners is more favorable than Rattler Midstream.

Profitability

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

Net Margins Return on Equity Return on Assets
Summit Midstream Partners 1.78% 13.50% 4.16%
Rattler Midstream N/A N/A N/A

Insider and Institutional Ownership

32.3% of Summit Midstream Partners shares are held by institutional investors. Comparatively, 0.5% of Rattler Midstream shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit Midstream Partners $506.65 million 0.87 $42.18 million $0.06 88.83
Rattler Midstream N/A N/A N/A N/A N/A

Summit Midstream Partners has higher revenue and earnings than Rattler Midstream.

Summary

Summit Midstream Partners beats Rattler Midstream on 7 of the 10 factors compared between the two stocks.

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. Its unconventional resource basins include the Appalachian Basin, which comprise 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 Denver-Julesburg Basin, which include the Niobrara and Codell shale formations in northeastern Colorado; the northern Delaware Basin that comprise the Wolfcamp and Bone Spring formations, in southeastern New Mexico; the Piceance Basin, which include the Mesaverde formation, and the Mancos and Niobrara shale formations in western Colorado and eastern Utah; and the Fort Worth Basin that comprises the Barnett Shale formation in north-central Texas. 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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