Latest Ratios: P/E Ratio 16.4x · EV/EBITDA 21.8x · ROE 16.6%. (2023–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Market Cap | $7.2B | $5.7B | $4.9B | — |
| Enterprise Value | $12.4B | $10.9B | $10.2B | — |
| P/E Ratio → | 16.38 | 13.02 | 15.51 | — |
| P/S Ratio | 4.47 | 3.56 | 2.31 | — |
| P/B Ratio | 2.67 | 2.12 | 1.88 | — |
| P/FCF | 13.14 | 10.46 | 12.67 | — |
| P/OCF | 9.88 | 7.86 | 9.74 | — |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| EV / Revenue | — | 6.79 | 4.82 | — |
| EV / EBITDA | 21.83 | 19.24 | 10.32 | — |
| EV / EBIT | 39.10 | 34.47 | 12.69 | — |
| EV / FCF | — | 19.95 | 26.39 | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Gross Margin | 19.2% | 19.2% | 70.7% | 82.5% |
| Operating Margin | 19.7% | 19.7% | 35.1% | 34.9% |
| Net Profit Margin | 27.4% | 27.4% | 14.9% | 22.0% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| ROE | 16.6% | 16.6% | 11.6% | 15.6% |
| ROA | 3.9% | 3.9% | 2.7% | 3.7% |
| ROIC | 3.0% | 3.0% | 6.8% | 6.1% |
| ROCE | 3.3% | 3.3% | 7.6% | 7.0% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Debt / Equity | 2.14 | 2.14 | 2.19 | 2.10 |
| Debt / EBITDA | 10.16 | 10.16 | 5.77 | 6.33 |
| Net Debt / Equity | — | 1.93 | 2.04 | 2.01 |
| Net Debt / EBITDA | 9.15 | 9.15 | 5.37 | 6.05 |
| Debt / FCF | — | 9.49 | 13.73 | 7.70 |
| Interest Coverage | 0.94 | 0.94 | 2.08 | 3.55 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Current Ratio | 1.50 | 1.50 | 1.25 | 1.26 |
| Quick Ratio | 1.43 | 1.43 | 1.13 | 1.18 |
| Cash Ratio | 0.43 | 0.43 | 0.23 | 0.13 |
| Asset Turnover | — | 0.14 | 0.19 | 0.17 |
| Inventory Turnover | 13.04 | 13.04 | 3.00 | 2.19 |
| Days Sales Outstanding | — | 266.91 | 215.73 | 255.59 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Dividend Yield | 5.9% | 7.4% | — | — |
| Payout Ratio | 96.1% | 96.1% | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Earnings Yield | 6.1% | 7.7% | 6.4% | — |
| FCF Yield | 7.6% | 9.6% | 7.9% | — |
| Buyback Yield | 0.0% | 0.0% | 0.0% | — |
| Total Shareholder Yield | 5.9% | 7.4% | 0.0% | — |
| Shares Outstanding | — | $209M | $208M | $208M |
Post-Spin Operational Volatility
According to current market data, South Bow trades at a forward EV/EBITDA of 11.60, which appears to discount the company relative to peers like Enbridge, suggesting investors remain cautious regarding the durability of standalone cash flows following the recent separation from its former parent entity.
The current P/E of 17.33 and forward P/E of 20.85 imply that the market is pricing in a contraction in earnings, likely due to the uncertainty surrounding the re-contracting of the Keystone system. This valuation gap compared to more diversified midstream peers warrants further investigation into whether the market is over-penalizing the company for its pure-play liquids exposure.
Based on reported financial statements, South Bow's ROIC has struggled to exceed 2% in recent quarters, a trend that reflects the heavy capital intensity of the Keystone pipeline system and the ongoing challenges of optimizing returns on a legacy asset base in a post-spin environment.
The low ROIC figures suggest that the company is currently failing to generate returns significantly above its cost of capital, which may indicate that maintenance capital expenditures are consuming a disproportionate share of operating cash flow. Investors should monitor whether management can improve these returns through debottlenecking initiatives rather than relying on new, high-cost infrastructure projects.
As reported in recent filings, South Bow's cash conversion cycle has exhibited extreme fluctuations, including a negative 1,166-day cycle in 2025Q1, which suggests that the company's working capital management is currently dominated by non-recurring timing differences rather than sustainable operational efficiency improvements.
The erratic nature of the DSO and DPO metrics indicates that the company is still normalizing its standalone accounting processes. Until these metrics stabilize, analysts should be wary of using them as a proxy for operational efficiency, as they appear heavily influenced by the transition from a divisional structure to an independent entity.
According to recent SEC filings, South Bow maintains a debt-to-equity ratio of 2.16 as of 2026Q1, a level that appears manageable but leaves little room for error given the capital-intensive nature of the Keystone system and the potential for rising interest costs in the current environment.
The interest coverage ratio, which has fluctuated between 1.11 and 2.56, suggests that debt service capacity is sensitive to operational volatility. While the current leverage is not immediately alarming for a midstream operator, it necessitates a focus on debt reduction to ensure long-term financial flexibility and dividend sustainability.
Based on the company's business model, the P/E ratio is the most commonly misapplied metric, as it fails to account for the significant non-cash depreciation charges inherent in large-scale pipeline infrastructure, which often mask the true underlying cash-generating capacity of the Keystone system.
Investors should prioritize Distributable Cash Flow (DCF) over GAAP Net Income, as the latter is frequently distorted by one-time separation costs and non-operating tax adjustments. Relying on P/E ratios in this context may lead to an inaccurate assessment of the company's ability to fund its dividend and maintain its critical infrastructure assets.
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Quick answers to the most common questions about buying SOBO stock.
South Bow Corporation's current P/E ratio is 16.4x. The historical average is 14.3x. This places it at the 100th percentile of its historical range.
South Bow Corporation's current EV/EBITDA is 21.8x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 14.8x.
South Bow Corporation's return on equity (ROE) is 16.6%. The historical average is 14.6%.
Based on historical data, South Bow Corporation is trading at a P/E of 16.4x. This is at the 100th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
South Bow Corporation's current dividend yield is 5.87% with a payout ratio of 96.1%.
South Bow Corporation has 19.2% gross margin and 19.7% operating margin. Operating margin between 10-20% is typical for established companies.
South Bow Corporation's Debt/EBITDA ratio is 10.2x, indicating high leverage. A ratio above 4x may signal elevated financial risk.