Reviewing ExxonMobil (NYSE:XOM) and South Bow (NYSE:SOBO)

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

Dividends

ExxonMobil pays an annual dividend of $4.12 per share and has a dividend yield of 2.3%. South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 5.7%. ExxonMobil pays out 42.3% of its earnings in the form of a dividend. 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 has raised its dividend for 42 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ExxonMobil and South Bow, as provided by MarketBeat.com.

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

ExxonMobil presently has a consensus price target of $168.70, indicating a potential downside of 6.24%. South Bow has a consensus price target of $32.50, indicating a potential downside of 7.26%. Given ExxonMobil’s stronger consensus rating and higher probable upside, equities analysts plainly believe ExxonMobil is more favorable than South Bow.

Risk & Volatility

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

Institutional & Insider Ownership

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

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ExxonMobil	$332.24 billion	2.24	$28.84 billion	$9.73	18.49
South Bow	$1.99 billion	3.68	$433.00 million	$2.21	15.86

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.

Summary

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

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.

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.