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 $10.5B against $7.2B — 1.5× the size. Frontline PLC trades at the lower P/E: 7.1× against 15.4×. 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%). Across the 20 metrics below, Frontline PLC leads on 18 and South Bow Corporation on 2.

Valuation

Metric FRO SOBO Oil & Gas Midstream median
P/E 7.14 15.38 13.19
P/S 3.52 3.54 2.60
P/B 3.36 2.66 2.08
Price to free cash flow 6.27 10.38 10.14
EV/EBITDA 7.80 10.93 8.11
EV/Sales 4.22 6.05 3.89
Earnings yield 14.01% 6.50% 6.83%
Free cash flow yield 15.96% 9.63% 6.94%

Profitability

Metric FRO SOBO Oil & Gas Midstream median
Gross margin 66.67% 49.48% 58.81%
Operating margin 54.14% 42.78% 32.14%
Net margin 49.37% 22.99% 21.16%
Free cash flow margin 56.19% 34.13% 10.15%
Return on equity 53.85% 17.35% 11.30%
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%) 15.44%
EPS growth (last fiscal year) (23.77%) 36.18% —
Revenue growth, 5-year CAGR 10.05% — 8.96%
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 10.43% — 7.29%
Payout ratio 0.47 — 0.64

Size

Metric FRO SOBO Oil & Gas Midstream median
Market cap 10.54b 7.16b 3.61b

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