QualityDipStocks / Energy · Natural Gas Distribution
South Bow SOBO
Outside our quality screen, so we don’t track its dips. It’s 9% below its 52-week high.
Outside our quality screen, trading below our fair value estimate.
Worth knowing
- Dividend yield 5.7%, top 5% of the 1731 we measure
From the data on this page, as of the last close. How we pick these
- Fair value est.
- $40.91+17%
- Market Value
- —
- Off 52-wk high
- −9%
- Risk vs market
- Lowbeta −0.19
5 bullish · 5 bearish See why
Repriced or dip?
Near its high
The price is 9% below its 52-week high (Jul 23), but the business held up: shares outstanding unchanged, free cash flow 0.0%.
Some numbers held up (shares outstanding unchanged, free cash flow 0.0%), others slipped. The price is 9% below its 52-week high.
The price is 9% below its 52-week high, and the business changed too.
Within 10% of its 52-week high, so there is no dip to judge yet.
Data-based read, not advice.
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($38.67, Jul 23) the price assumed about 2%/yr free-cash-flow growth; today about 0%. The last 3 years delivered 0%/yr (revenue).
Dashed line: what the last 3 years delivered, 0%/yr (revenue)
| High | Now | |
|---|---|---|
| Price | $38.67Jul 23 | $35.08 |
| Implied growth | +2% | 0% |
| P/E | 18.6× | 16.9× |
| P/FCF | 15.0× | 13.6× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
Cyclical / peak cash flow — treat with care
What the price implies To be worth today’s price, SOBO’s free cash flow would need to stay flat for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much SOBO moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 1.8× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- -0.19
- Volatility
- 23% vs 13% SPY
- Correlation SPY
- −0.11
- Correlation QQQ
- −0.11
How it ranks
Where SOBO stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Top quarter on 2 of 4 measures
- Discount to fair value estimate17% · price below our base caseTop 35%of 1,314
- Free cash flow yield7.4% · free cash flow vs market capTop 22%of 1,391
- Dividends + buybacks yield5.7% · cash paid out or used to retire shares, vs market capTop 22%of 1,836
- Revenue growth, last 12 months−6.3% · vs the 12 months beforeLowest 4%of 1,814
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $40.91 · FCF value $40.85
Cyclical / peak cash flow — treat with care
Assumes 3.0% growth for 5 years (revenue grew -0.5% a year FY23–FY25; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $2.58 a share (fiscal year to Dec 31, 2025), from the 40-F filed Mar 16, 2026.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationFree-cash-flow yield of 7.4% (price / FCF 13.6×): $539M of free cash in the last 12 months.
Cash returnsDividend yield of 5.7% ($416M paid over 12 months, 96% of earnings).
GrowthDiluted EPS grew 36% to $2.07 in FY2025.
Cash returnsFree cash flow grew 39% over the last 12 months vs the 12 months before.
ValuationOur DCF fair value estimate is $40.91, 17% above the price (cyclical or peak cash flow, so treat with care).
Top bearish points 5 of 5
GrowthSales fell 6% over the last 12 months vs the 12 months before (SEC filings).
GrowthSales grew only −0.5% a year from FY2023 to FY2025.
Cash returnsDividends take 96% of earnings ($416M paid over 12 months), leaving little to reinvest or raise the payout.
QualityDoesn’t pass our quality screen: net debt 5.0× EBITDA (limit 3×).
RiskCyclical business: one strong year of cash flow can make it look cheaper than it is.
All fundamentals
P/E 16.9 · FCF yield 7.4% · ROE 16%
Valuation
- P/E
- 16.9×Energy median 15.9×
- Price / FCF
- 13.6×
- FCF yield
- 7.4%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 3.69×
- Price / book
- 2.70×
- Market cap
- $7.3Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $2.0B
- Sales growth, 12 months
- −6.3%vs the 12 months before
- Sales growth, 3 yrs
- −0.5%/yrfrom FY2023
- Diluted EPS, 12 months
- $2.07
- EPS growth, last FY
- +36.2%
- Net income, 12 months
- $433M
- Net income growth
- +37%12 months vs before
Profitability
- Gross margin
- 84.2%
- Operating margin
- n/anot reported in its SEC filings
- Net margin
- 21.8%
- FCF margin
- 27.1%
- Return on equity
- 16%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $549M
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $539M
- FCF growth, 12 months
- +39%
- Dividend yield
- 5.68%$416M paid
- Payout ratio
- 96%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- n/ano quarterly diluted share count
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Dec 31, 2025; balance sheet at Dec 31, 2025. From South Bow’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.3B · Sales +4%
- Free cash flow, 12 months$0.3B
- Free-cash-flow yield7.4%
- Free-cash-flow margin17%
- Gross margin50%
- Operating margin44%
- Return on invested capital9%
- Return on equity17%
- Sales growth (latest quarter vs year-ago quarter)+4%
- Net debt / EBITDA5.0×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $35.08
- 52-wk lowlowest close, 1 year$25.26−28.0%
- PriceMon Nov 2 close$35.08you are here
- 52-wk highhighest close, 1 year$38.67+10.2%
- Fair value est.base case$40.91+16.6%
Momentum & 52-week range
RSI 51 · 5 days −1.7%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Next report
Nov 4
- DateWed Nov 4, after the close
- Consensus EPS$0.43
- Year-ago EPS$0.47
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
SOBO is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on South Bow in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in Natural Gas Distribution
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.