Frontline (FRO) vs. Summit Midstream Partners, (SMLP) Critical Analysis
Frontline (NYSE: FRO) and Summit Midstream Partners, (NYSE:SMLP) are both small-cap transportation companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.
Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 10.8%. Summit Midstream Partners, pays an annual dividend of $2.30 per share and has a dividend yield of 10.9%. Frontline pays out 300.0% 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 Frontline 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%|
Volatility & Risk
Frontline has a beta of 2.04, meaning that its share price is 104% more volatile than the S&P 500. Comparatively, Summit Midstream Partners, has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500.
This is a summary of current ratings and target prices for Frontline and Summit Midstream Partners,, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Midstream Partners,||1||2||3||0||2.33|
Frontline presently has a consensus price target of $6.00, indicating a potential upside of 7.53%. Summit Midstream Partners, has a consensus price target of $26.20, indicating a potential upside of 24.17%. Given Summit Midstream Partners,’s stronger consensus rating and higher probable upside, analysts clearly believe Summit Midstream Partners, is more favorable than Frontline.
Insider and Institutional Ownership
12.4% of Frontline shares are held by institutional investors. Comparatively, 49.8% of Summit Midstream Partners, shares are held by institutional investors. 48.1% of Frontline shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Frontline and Summit Midstream Partners,’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Frontline||$660.53 million||1.43||$263.79 million||$0.20||27.90|
|Summit Midstream Partners,||$459.61 million||3.35||$279.66 million||$0.24||87.92|
Summit Midstream Partners, has higher revenue, but lower earnings than Frontline. Frontline 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.
Summit Midstream Partners, beats Frontline on 11 of the 17 factors compared between the two stocks.
Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).
About Summit Midstream Partners,
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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