Mplx (NYSE:MPLX) vs. South Bow (NYSE:SOBO) Critical Review

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

Insider and Institutional Ownership

24.3% of Mplx shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for South Bow and Mplx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Bow	2	8	1	2	2.23
Mplx	1	1	8	0	2.70

South Bow currently has a consensus price target of $26.25, indicating a potential upside of 9.92%. Mplx has a consensus price target of $54.00, indicating a potential upside of 11.27%. Given Mplx’s stronger consensus rating and higher possible upside, analysts plainly believe Mplx is more favorable than South Bow.

Dividends

South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 8.4%. Mplx pays an annual dividend of $3.82 per share and has a dividend yield of 7.9%. South Bow pays out 108.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
South Bow	N/A	N/A	N/A
Mplx	36.18%	31.94%	11.42%

Earnings and Valuation

This table compares South Bow and Mplx”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Bow	$2.12 billion	2.34	$384.88 million	$1.85	12.91
Mplx	$10.90 billion	4.55	$4.32 billion	$4.21	11.53

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

Summary

Mplx beats South Bow on 12 of the 15 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 Mplx

MPLX LP engages in the operation of midstream energy infrastructure and logistics assets, and distribution fuels services. It operates through the Logistics and Storage (L&S) and Gathering and Processing (G&P) segments. The Logistics and Storage segment transports, stores, distributes, and markets crude oil, asphalt, refined petroleum products, and water. The Gathering and Processing segment gathers, processes, and transports natural gas, and gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs). The company was founded on March 27, 2012 and is headquartered in Findlay, OH.