Analyzing Mplx (NYSE:MPLX) & South Bow (NYSE:SOBO)

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

Institutional and Insider Ownership

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mplx	$10.90 billion	4.93	$4.32 billion	$4.21	12.48
South Bow	$2.12 billion	2.45	$385.21 million	$1.85	13.46

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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Mplx and South Bow, as reported 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 price target of $54.00, suggesting a potential upside of 2.78%. South Bow has a consensus price target of $26.25, suggesting a potential upside of 5.38%. Given South Bow’s higher possible upside, analysts clearly believe South Bow is more favorable than Mplx.

Dividends

Mplx pays an annual dividend of $3.82 per share and has a dividend yield of 7.3%. South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 8.0%. 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.

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

Summary

Mplx beats South Bow on 11 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.