South Bow Corporation (SOBO) vs Scorpio Tankers Inc. (STNG)

South Bow Corporation and Scorpio Tankers Inc. are both Oil & Gas Midstream companies. South Bow Corporation is the larger, with a market value of $7.2B against $4.1B — 1.8× the size. Scorpio Tankers Inc. trades at the lower P/E: 4.6× against 15.4×. Scorpio Tankers Inc. grew revenue faster over the last twelve months: 32.7% against −2.10%. Scorpio Tankers Inc. has the higher net margin (67.2% vs 23.0%) and the higher return on invested capital (20.6% vs 6.54%). Across the 20 metrics below, Scorpio Tankers Inc. leads on 19 and South Bow Corporation on 1.

Valuation

Metric SOBO STNG Oil & Gas Midstream median
P/E 15.38 4.64 13.19
P/S 3.54 3.07 2.60
P/B 2.66 1.03 2.08
Price to free cash flow 10.38 2.13 10.14
EV/EBITDA 10.93 2.60 8.11
EV/Sales 6.05 2.16 3.89
Earnings yield 6.50% 21.54% 6.83%
Free cash flow yield 9.63% 46.89% 6.94%

Profitability

Metric SOBO STNG Oil & Gas Midstream median
Gross margin 49.48% 72.97% 58.81%
Operating margin 42.78% 68.57% 32.14%
Net margin 22.99% 67.16% 21.16%
Free cash flow margin 34.13% 144.00% 10.15%
Return on equity 17.35% 24.62% 11.30%
Return on assets 4.02% 18.95% 5.00%
Return on invested capital 6.54% 20.59% 6.13%

Growth

Metric SOBO STNG Oil & Gas Midstream median
Revenue growth (TTM) (2.10%) 32.68% 15.44%
EPS growth (last fiscal year) 36.18% (46.54%) —
Revenue growth, 5-year CAGR — 0.48% 8.96%
Net income growth, 5-year CAGR — 29.61% 0.00%

Health

Metric SOBO STNG Oil & Gas Midstream median
Debt to equity 2.15 0.20 0.78
Current ratio 1.52 6.93 1.19
Net debt to EBITDA 4.90 (0.28) 3.42

Dividend

Metric SOBO STNG Oil & Gas Midstream median
Dividend yield — 1.78% 7.29%
Payout ratio — 0.05 0.64

Size

Metric SOBO STNG Oil & Gas Midstream median
Market cap 7.16b 4.05b 3.61b

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