Analyzing Summit Midstream (NYSE:SMC) & Kodiak Gas Services (NYSE:KGS)

Summit Midstream (NYSE:SMC) and Kodiak Gas Services (NYSE:KGS) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Profitability

This table compares Summit Midstream and Kodiak Gas Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Midstream	-23.01%	0.71%	0.22%
Kodiak Gas Services	2.23%	7.91%	2.63%

Institutional & Insider Ownership

43.0% of Summit Midstream shares are owned by institutional investors. Comparatively, 25.0% of Kodiak Gas Services shares are owned by institutional investors. 5.3% of Summit Midstream shares are owned by insiders. Comparatively, 0.2% of Kodiak Gas Services shares are owned by insiders. 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.

Risk and Volatility

Summit Midstream has a beta of 2.37, meaning that its share price is 137% more volatile than the S&P 500. Comparatively, Kodiak Gas Services has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Summit Midstream and Kodiak Gas Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Midstream	0	0	0	0	0.00
Kodiak Gas Services	0	2	9	0	2.82

Kodiak Gas Services has a consensus target price of $39.36, indicating a potential downside of 19.63%. Given Kodiak Gas Services’ stronger consensus rating and higher possible upside, analysts clearly believe Kodiak Gas Services is more favorable than Summit Midstream.

Earnings and Valuation

This table compares Summit Midstream and Kodiak Gas Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Midstream	$449.92 million	1.00	-$38.95 million	($12.81)	-3.28
Kodiak Gas Services	$1.08 billion	3.99	$20.07 million	$0.29	168.89

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

Summary

Kodiak Gas Services beats Summit Midstream on 11 of the 14 factors compared between the two stocks.

About Summit Midstream

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.

About Kodiak Gas Services

Kodiak Gas Services, Inc. operates contract compression infrastructure for customers in the oil and gas industry in the United States. It operates in two segments, Compression Operations and Other Services. The Compression Operations segment operates company-owned and customer-owned compression infrastructure to enable the production, gathering, and transportation of natural gas and oil. The Other Services segment provides a range of contract services, including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. The company was formerly known as Frontier TopCo, Inc. Kodiak Gas Services, Inc. was founded in 2010 and is headquartered in The Woodlands, Texas.