Head to Head Comparison: Paramount Resources (OTCMKTS:PRMRF) & South Bow (NYSE:SOBO)

Paramount Resources (OTCMKTS:PRMRF) and South Bow (NYSE:SOBO) are both mid-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paramount Resources	$692.73 million	4.52	$922.32 million	$0.57	37.63
South Bow	$1.99 billion	3.60	$433.00 million	$2.21	15.51

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

Dividends

Paramount Resources pays an annual dividend of $0.43 per share and has a dividend yield of 2.0%. South Bow pays an annual dividend of $2.00 per share and has a dividend yield of 5.8%. Paramount Resources pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Paramount Resources	12.52%	4.31%	3.20%
South Bow	22.99%	15.84%	3.73%

Insider & Institutional Ownership

4.1% of Paramount Resources shares are owned by institutional investors. 36.3% of Paramount Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Paramount Resources and South Bow, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paramount Resources	0	3	4	1	2.75
South Bow	3	8	4	0	2.07

South Bow has a consensus price target of $33.00, suggesting a potential downside of 3.73%. Given South Bow’s higher possible upside, analysts clearly believe South Bow is more favorable than Paramount Resources.

Risk & Volatility

Paramount Resources has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, South Bow has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Summary

Paramount Resources beats South Bow on 9 of the 16 factors compared between the two stocks.

About Paramount Resources

Paramount Resources Ltd. explores for and develops conventional and unconventional petroleum and natural gas reserves and resources in Canada. The company holds interests in the Karr and Wapiti Montney properties covering an area of 109,000 net acres located south of the city of Grande Prairie, Alberta; Kaybob North Duvernay development and natural gas producing properties covering an area of 124,000 net acres located in west-central Alberta; and Willesden Green Duvernay development in central Alberta and shale gas producing properties in the Horn River Basin in northeast British Columbia covering an area of 249,000 net acres. The company was founded in 1976 and is based in Calgary, Canada.

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.