Summit Midstream (NYSE:SMC) and Kodiak Gas Services (NYSE:KGS) Critical Analysis

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

Profitability

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

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

Volatility & Risk

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

Insider and Institutional Ownership

25.0% of Kodiak Gas Services shares are held by institutional investors. Comparatively, 43.0% of Summit Midstream shares are held by institutional investors. 0.2% of Kodiak Gas Services shares are held by insiders. Comparatively, 5.3% of Summit Midstream shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kodiak Gas Services	$850.38 million	5.02	$20.07 million	$0.29	168.08
Summit Midstream	$458.90 million	0.98	-$38.95 million	($12.81)	-3.30

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.

Analyst Ratings

This is a summary of recent ratings and target prices for Kodiak Gas Services and Summit Midstream, as provided by MarketBeat.

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

Kodiak Gas Services presently has a consensus price target of $39.36, indicating a potential downside of 19.24%. Given Kodiak Gas Services’ stronger consensus rating and higher possible upside, research analysts clearly believe Kodiak Gas Services is more favorable than Summit Midstream.

Summary

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

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.

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.