Analyzing Delek Logistics Partners (NYSE:DKL) and South Bow (NYSE:SOBO)

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

Dividends

South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 8.3%. Delek Logistics Partners pays an annual dividend of $4.42 per share and has a dividend yield of 12.2%. 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. Delek Logistics Partners pays out 147.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

11.8% of Delek Logistics Partners shares are held by institutional investors. 1.0% of Delek Logistics Partners shares are held by 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.

Analyst Ratings

This is a summary of recent recommendations for South Bow and Delek Logistics Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Bow	2	8	1	2	2.23
Delek Logistics Partners	1	0	3	0	2.50

South Bow currently has a consensus price target of $26.25, suggesting a potential upside of 8.61%. Delek Logistics Partners has a consensus price target of $44.25, suggesting a potential upside of 22.31%. Given Delek Logistics Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Delek Logistics Partners is more favorable than South Bow.

Profitability

This table compares South Bow and Delek Logistics Partners’ 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
Delek Logistics Partners	13.15%	-155.77%	8.39%

Valuation and Earnings

This table compares South Bow and Delek Logistics Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Bow	$2.12 billion	2.37	$385.21 million	$1.85	13.06
Delek Logistics Partners	$940.64 million	2.06	$126.24 million	$2.99	12.10

South Bow has higher revenue and earnings than Delek Logistics Partners. Delek Logistics Partners 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

Delek Logistics Partners beats South Bow on 9 of the 16 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 Delek Logistics Partners

Delek Logistics Partners, LP provides gathering, pipeline, transportation, and other services for crude oil, intermediates, refined products, natural gas, storage, wholesale marketing, terminalling water disposal and recycling customers in the United States. The Gathering and Processing segment consists of pipelines, tanks, and offloading facilities that provide crude oil and natural gas gathering and processing, water disposal and recycling, and storage services, as well as crude oil transportation services to third parties. The Wholesale Marketing and Terminalling segment includes refined products terminals and pipelines in Texas, Tennessee, and Arkansas. This segment provides marketing services for the refined products and terminalling services at refined products terminals to independent third parties. The Storage and Transportation segment comprises tanks, offloading facilities, trucks, and ancillary assets, which provide crude oil, intermediate, and refined products transportation and storage services. Delek Logistics GP, LLC serves as the general partner of the company. Delek Logistics Partners, LP was incorporated in 2012 and is headquartered in Brentwood, Tennessee. Delek Logistics Partners, LP operates as a subsidiary of Delek US Holdings, Inc.