Contrasting South Bow (NYSE:SOBO) and Mplx (NYSE:MPLX)

Mplx (NYSE:MPLX) and South Bow (NYSE:SOBO) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

24.3% of Mplx shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Mplx and South Bow”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mplx	$10.90 billion	4.42	$4.32 billion	$4.21	11.20
South Bow	$2.12 billion	2.29	$384.88 million	$1.85	12.61

Mplx has higher revenue and earnings than South Bow. Mplx is trading at a lower price-to-earnings ratio than South Bow, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mplx and South Bow’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mplx	36.18%	31.94%	11.42%
South Bow	N/A	N/A	N/A

Dividends

Mplx pays an annual dividend of $3.82 per share and has a dividend yield of 8.1%. South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 8.6%. Mplx pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. South Bow pays out 108.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Mplx and South Bow, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mplx	1	1	8	0	2.70
South Bow	2	8	1	2	2.23

Mplx presently has a consensus target price of $54.00, suggesting a potential upside of 14.53%. South Bow has a consensus target price of $26.25, suggesting a potential upside of 12.54%. Given Mplx’s stronger consensus rating and higher possible upside, analysts plainly believe Mplx is more favorable than South Bow.

Summary

Mplx beats South Bow on 12 of the 15 factors compared between the two stocks.

About Mplx

MPLX LP engages in the operation of midstream energy infrastructure and logistics assets, and distribution fuels services. It operates through the Logistics and Storage (L&S) and Gathering and Processing (G&P) segments. The Logistics and Storage segment transports, stores, distributes, and markets crude oil, asphalt, refined petroleum products, and water. The Gathering and Processing segment gathers, processes, and transports natural gas, and gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs). The company was founded on March 27, 2012 and is headquartered in Findlay, OH.

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.