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

Hess Midstream Partners LP and South Bow Corporation are both Oil & Gas Midstream companies. South Bow Corporation is the larger, with a market value of $7.0B against $6.3B — 1.1× the size. Hess Midstream Partners LP trades at the lower P/E: 10.6× against 15.7×. Hess Midstream Partners LP grew revenue faster over the last twelve months: 2.78% against −2.10%. Hess Midstream Partners LP has the higher net margin (23.2% vs 23.0%) and the higher return on invested capital (15.4% vs 6.54%). Both pay a dividend; Hess Midstream Partners LP yields more (10.1% vs 5.77%). 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 10.57 15.70 12.77
P/S 2.44 3.62 2.36
P/B 10.15 2.72 2.09
Price to free cash flow 4.70 10.59 9.71
EV/EBITDA 6.15 11.06 8.30
EV/Sales 4.72 6.12 3.88
Earnings yield 9.46% 6.37% 7.15%
Free cash flow yield 21.28% 9.44% 6.86%

Profitability

Metric HESM SOBO Oil & Gas Midstream median
Gross margin 100.00% 49.48% 56.58%
Operating margin 62.06% 42.78% 34.18%
Net margin 23.23% 22.99% 22.50%
Free cash flow margin 51.90% 34.13% 13.70%
Return on equity 83.74% 17.35% 14.65%
Return on assets 8.64% 4.02% 5.00%
Return on invested capital 15.41% 6.54% 6.13%

Growth

Metric HESM SOBO Oil & Gas Midstream median
Revenue growth (TTM) 2.78% (2.10%) 15.60%
EPS growth (last fiscal year) 14.86% 36.18% (7.86%)
Revenue growth, 5-year CAGR 8.23% — 9.59%
Net income growth, 5-year CAGR 71.19% — 0.00%

Health

Metric HESM SOBO Oil & Gas Midstream median
Debt to equity 9.48 2.15 0.78
Current ratio 0.77 1.52 1.19
Net debt to EBITDA 3.05 4.90 3.42

Dividend

Metric HESM SOBO Oil & Gas Midstream median
Dividend yield 10.07% 5.77% 4.54%
Payout ratio 1.06 0.91 0.76

Size

Metric HESM SOBO Oil & Gas Midstream median
Market cap 6.31b 7.04b 3.73b

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