Head-To-Head Review: Kinder Morgan (KMI) & Summit Midstream Partners, (SMLP)
Kinder Morgan (NYSE: KMI) and Summit Midstream Partners, (NYSE:SMLP) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.
Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Summit Midstream Partners, pays an annual dividend of $2.30 per share and has a dividend yield of 10.8%. Kinder Morgan pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Midstream Partners, pays out 958.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Midstream Partners, has raised its dividend for 3 consecutive years. Summit Midstream Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Kinder Morgan and Summit Midstream Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Summit Midstream Partners,||5.78%||3.55%||1.33%|
Valuation and Earnings
This table compares Kinder Morgan and Summit Midstream Partners,’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kinder Morgan||$13.51 billion||3.20||$6.10 billion||$0.31||62.42|
|Summit Midstream Partners,||$459.61 million||3.37||$279.66 million||$0.24||88.34|
Kinder Morgan has higher revenue and earnings than Summit Midstream Partners,. Kinder Morgan is trading at a lower price-to-earnings ratio than Summit Midstream Partners,, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
59.2% of Kinder Morgan shares are held by institutional investors. Comparatively, 49.8% of Summit Midstream Partners, shares are held by institutional investors. 14.0% of Kinder Morgan shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Kinder Morgan has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Summit Midstream Partners, has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Kinder Morgan and Summit Midstream Partners,, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners,||1||2||3||0||2.33|
Kinder Morgan currently has a consensus target price of $23.71, indicating a potential upside of 22.55%. Summit Midstream Partners, has a consensus target price of $26.20, indicating a potential upside of 23.58%. Given Summit Midstream Partners,’s higher probable upside, analysts plainly believe Summit Midstream Partners, is more favorable than Kinder Morgan.
Kinder Morgan beats Summit Midstream Partners, on 11 of the 17 factors compared between the two stocks.
Kinder Morgan Company Profile
Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.
Summit Midstream Partners, Company Profile
Summit Midstream Partners, LP focuses on developing, owning and operating midstream energy infrastructure assets. The Company’s segments include the Utica Shale, which includes its ownership interest in Ohio Gathering, as well as Summit Utica; the Williston Basin, which includes Bison Midstream, Polar and Divide and Tioga Midstream; the Marcellus Shale, which includes Mountaineer Midstream; the Barnett Shale, which includes DFW Midstream Services LLC (DFW Midstream), and the Piceance Basin /DJ Basins, which includes Grand River and Niobrara G&P. The Company’s assets are located in the producing areas of unconventional resource basins, primarily shale formations, in the continental United States. It provides natural gas gathering, treating and processing services, as well as crude oil and produced water gathering services pursuant to long-term and fee-based agreements with its customers.
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