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 is the larger, with a market value of $7.9B against $7.2B — 1.1× the size. Hess Midstream Partners LP trades at the lower P/E: 13.2× against 15.4×. 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%). Across the 20 metrics below, Hess Midstream Partners LP leads on 16 and South Bow Corporation on 4.

Valuation

Metric HESM SOBO Oil & Gas Midstream median
P/E 13.19 15.38 13.19
P/S 3.04 3.54 2.60
P/B 12.66 2.66 2.08
Price to free cash flow 5.86 10.38 10.14
EV/EBITDA 6.94 10.93 8.11
EV/Sales 5.32 6.05 3.89
Earnings yield 7.58% 6.50% 6.83%
Free cash flow yield 17.06% 9.63% 6.94%

Profitability

Metric HESM SOBO Oil & Gas Midstream median
Gross margin 100.00% 49.48% 58.81%
Operating margin 62.06% 42.78% 32.14%
Net margin 23.23% 22.99% 21.16%
Free cash flow margin 51.90% 34.13% 10.15%
Return on equity 83.74% 17.35% 11.30%
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%) 15.44%
EPS growth (last fiscal year) 14.86% 36.18% —
Revenue growth, 5-year CAGR 8.23% — 8.96%
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 8.10% — 7.29%
Payout ratio — — 0.64

Size

Metric HESM SOBO Oil & Gas Midstream median
Market cap 7.93b 7.16b 3.61b

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