Hess Midstream Partners LP (HESM) vs South Bow Corporation (SOBO)

Hess Midstream Partners LP and South Bow Corporation are both Oil & Gas Midstream companies. Hess Midstream Partners LP and South Bow Corporation are of similar size ($6.6B and $6.3B). Hess Midstream Partners LP trades at the lower P/E: 10.5× against 14.4×. Hess Midstream Partners LP grew revenue faster over the last twelve months: −0.60% against −2.10%. Hess Midstream Partners LP has the higher net margin (23.5% vs 23.0%) and the higher return on invested capital (15.7% vs 6.54%). Both pay a dividend; Hess Midstream Partners LP yields more (10.3% vs 6.30%). Across the 21 metrics below, Hess Midstream Partners LP leads on 17 and South Bow Corporation on 4.

Valuation

Metric HESM SOBO Oil & Gas Midstream median
P/E 10.48 14.37 11.68
P/S 2.43 3.31 2.39
P/B 9.65 2.49 1.68
Price to free cash flow 4.33 9.70 8.52
EV/EBITDA 6.05 10.51 9.03
EV/Sales 4.68 5.81 3.43
Earnings yield 9.54% 6.96% 7.78%
Free cash flow yield 23.09% 10.31% 7.11%

Profitability

Metric HESM SOBO Oil & Gas Midstream median
Gross margin 100.00% 49.48% 54.87%
Operating margin 62.70% 42.78% 34.73%
Net margin 23.49% 22.99% 20.12%
Free cash flow margin 56.20% 34.13% 14.43%
Return on equity 90.65% 17.35% 11.73%
Return on assets 8.72% 4.02% 4.43%
Return on invested capital 15.70% 6.54% 6.10%

Growth

Metric HESM SOBO Oil & Gas Midstream median
Revenue growth (TTM) (0.60%) (2.10%) 14.88%
EPS growth (last fiscal year) 14.86% 36.18% (7.78%)
Revenue growth, 5-year CAGR 8.23% — 10.05%
Net income growth, 5-year CAGR 71.19% — 0.00%

Health

Metric HESM SOBO Oil & Gas Midstream median
Debt to equity 8.90 2.15 0.77
Current ratio 0.25 1.52 1.19
Net debt to EBITDA 3.05 4.90 3.46

Dividend

Metric HESM SOBO Oil & Gas Midstream median
Dividend yield 10.30% 6.30% 4.94%
Payout ratio 1.08 0.91 0.73

Size

Metric HESM SOBO Oil & Gas Midstream median
Market cap 6.25b 6.59b 3.56b

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