Frontline PLC (FRO) vs South Bow Corporation (SOBO)

Frontline PLC and South Bow Corporation are both Oil & Gas Midstream companies. Frontline PLC is the larger, with a market value of $11.7B against $7.0B — 1.7× the size. Frontline PLC trades at the lower P/E: 7.9× against 15.7×. Frontline PLC grew revenue faster over the last twelve months: 63.5% against −2.10%. Frontline PLC has the higher net margin (49.4% vs 23.0%) and the higher return on invested capital (19.4% vs 6.54%). Both pay a dividend; Frontline PLC yields more (10.3% vs 5.77%). Across the 21 metrics below, Frontline PLC leads on 18 and South Bow Corporation on 3.

Valuation

Metric FRO SOBO Oil & Gas Midstream median
P/E 7.87 15.70 12.77
P/S 3.88 3.62 2.36
P/B 3.71 2.72 2.09
Price to free cash flow 6.91 10.59 9.71
EV/EBITDA 8.47 11.06 8.30
EV/Sales 4.58 6.12 3.88
Earnings yield 12.71% 6.37% 7.15%
Free cash flow yield 14.47% 9.44% 6.86%

Profitability

Metric FRO SOBO Oil & Gas Midstream median
Gross margin 66.67% 49.48% 56.58%
Operating margin 54.14% 42.78% 34.18%
Net margin 49.37% 22.99% 22.50%
Free cash flow margin 56.19% 34.13% 13.70%
Return on equity 53.85% 17.35% 14.65%
Return on assets 24.94% 4.02% 5.00%
Return on invested capital 19.35% 6.54% 6.13%

Growth

Metric FRO SOBO Oil & Gas Midstream median
Revenue growth (TTM) 63.48% (2.10%) 15.60%
EPS growth (last fiscal year) (23.77%) 36.18% (7.86%)
Revenue growth, 5-year CAGR 10.05% — 9.59%
Net income growth, 5-year CAGR (1.69%) — 0.00%

Health

Metric FRO SOBO Oil & Gas Midstream median
Debt to equity 0.77 2.15 0.78
Current ratio 1.87 1.52 1.19
Net debt to EBITDA 3.03 4.90 3.42

Dividend

Metric FRO SOBO Oil & Gas Midstream median
Dividend yield 10.25% 5.77% 4.54%
Payout ratio 0.81 0.91 0.76

Size

Metric FRO SOBO Oil & Gas Midstream median
Market cap 11.70b 7.04b 3.73b

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