Critical Comparison: South Bow (SOBO) vs. Its Competitors

South Bow (NYSE:SOBO) is one of 21 public companies in the “Pipelines, Except Natural Gas” industry, but how does it contrast to its rivals? We will compare South Bow to similar companies based on the strength of its analyst recommendations, earnings, profitability, institutional ownership, risk, valuation and dividends.

Institutional & Insider Ownership

50.2% of shares of all “Pipelines, Except Natural Gas” companies are owned by institutional investors. 2.6% of shares of all “Pipelines, Except Natural Gas” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares South Bow and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Bow	N/A	N/A	N/A
South Bow Competitors	29.09%	23.03%	9.57%

Dividends

South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 8.7%. South Bow pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Pipelines, Except Natural Gas” companies pay a dividend yield of 7.5% and pay out 117.8% of their earnings in the form of a dividend. South Bow is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and price targets for South Bow and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Bow	2	4	1	2	2.33
South Bow Competitors	166	1641	1803	170	2.52

South Bow currently has a consensus price target of $25.00, suggesting a potential upside of 9.03%. As a group, “Pipelines, Except Natural Gas” companies have a potential upside of 15.27%. Given South Bow’s rivals stronger consensus rating and higher possible upside, analysts clearly believe South Bow has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares South Bow and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
South Bow	N/A	N/A	13.10
South Bow Competitors	$10.59 billion	$805.98 million	15.10

South Bow’s rivals have higher revenue and earnings than South Bow. South Bow is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

South Bow rivals beat South Bow on 10 of the 13 factors compared.

About South Bow

South Bow Corp is a strategic liquids pipeline company. It is a new liquids-focused midstream infrastructure company. South Bow Corp is based in Canada.