Comparing South Bow (NYSE:SOBO) & ExxonMobil (NYSE:XOM)

South Bow (NYSE:SOBO) and ExxonMobil (NYSE:XOM) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for South Bow and ExxonMobil, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Bow	4	6	4	0	2.00
ExxonMobil	0	14	11	1	2.50

South Bow currently has a consensus price target of $32.50, indicating a potential downside of 9.59%. ExxonMobil has a consensus price target of $167.70, indicating a potential downside of 8.44%. Given ExxonMobil’s stronger consensus rating and higher possible upside, analysts plainly believe ExxonMobil is more favorable than South Bow.

Dividends

South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 5.6%. ExxonMobil pays an annual dividend of $4.12 per share and has a dividend yield of 2.2%. South Bow pays out 90.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ExxonMobil pays out 53.0% of its earnings in the form of a dividend. ExxonMobil has raised its dividend for 42 consecutive years.

Valuation & Earnings

This table compares South Bow and ExxonMobil”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Bow	$1.99 billion	3.78	$433.00 million	$2.21	16.27
ExxonMobil	$332.24 billion	2.28	$28.84 billion	$7.77	23.57

ExxonMobil has higher revenue and earnings than South Bow. South Bow is trading at a lower price-to-earnings ratio than ExxonMobil, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares South Bow and ExxonMobil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Bow	22.99%	15.84%	3.73%
ExxonMobil	8.88%	13.14%	7.62%

Risk and Volatility

South Bow has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, ExxonMobil has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Institutional and Insider Ownership

61.8% of ExxonMobil shares are owned by institutional investors. 0.0% of ExxonMobil shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

ExxonMobil beats South Bow on 13 of the 18 factors compared between the two stocks.

About South Bow

South Bow Corp is a strategic liquids pipeline company. It is a new liquids-focused midstream infrastructure company. South Bow Corp is based in Canada.

About ExxonMobil

ExxonMobil Corporation engages in the exploration and production of crude oil and natural gas in the United States and internationally. It operates through Upstream, Energy Products, Chemical Products, and Specialty Products segments. The Upstream segment explores for and produces crude oil and natural gas. The Energy Products segment offers fuels, aromatics, catalysts, and licensing services. It sells its products under the Exxon, Esso, and Mobil brands. The Chemical Products segment manufactures and markets petrochemicals, including olefins, polyolefins, and intermediates. The Specialty Products segment offers performance products, including lubricants, basestocks, waxes, synthetics, elastomers, and resins. The company is also involved in the manufacturing, trade, transport, and selling crude oil, natural gas, petroleum products, petrochemicals, and other specialty products in pursuit of lower-emission business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. Exxon Mobil Corporation was founded in 1870 and is based in Spring, Texas.