MeritValue

South Bow Corp

SOBOdata completeness 75%3 fiscal years on file

Data notes: no data for concept 'totalDebt'; no data for concept 'interestExpense'

The thesis, from the filings

South Bow Corp earns about 17% on invested capital, with a roughly flat share count. The applicable estimate puts fair value near $21.49 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2023FY 2024FY 2025
Revenue$2.01B1$2.12B2$1.99B2
Net income$442M3$316M4$433M4
Operating cash flow$779M5$529M6$717M6
Capital expenditure$47M7$141M7—
Free cash flow (derived)$732M5$388M6—
Total debt———
Cash & equivalents$262M8$397M9$549M9
Diluted shares207.6M208.2M208.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$129.74
your share of equity
Profit it earned you last year
$20.74
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $129.74 of net worth that earned you $20.74 last year.

iii. Is this a good business?
Moat signal · return on invested capital
17% avg · 3y
FY23 17%FY24 14%FY25 20%

It earned an average 17% on invested capital over 3 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+1% shares · 3y

Share count is roughly flat over 3 years — little dilution, little buyback.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 2 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 2 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$21.49
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$433M
  • growthAssumed0.0%
Graham Number
$24.58
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 40-F · period ending 2023-12-31 · accession 0001628280-25-010681 (Revenues)
  2. 40-F · period ending 2024-12-31 · accession 0002019061-26-000006 (Revenues)
  3. 40-F · period ending 2023-12-31 · accession 0001628280-25-010681 (ProfitLoss)
  4. 40-F · period ending 2024-12-31 · accession 0002019061-26-000006 (ProfitLoss)
  5. 40-F · period ending 2023-12-31 · accession 0001628280-25-010681 (NetCashProvidedByUsedInOperatingActivities)
  6. 40-F · period ending 2024-12-31 · accession 0002019061-26-000006 (NetCashProvidedByUsedInOperatingActivities)
  7. 40-F · period ending 2023-12-31 · accession 0001628280-25-010681 (PaymentsToAcquireProductiveAssets)
  8. 40-F · period ending 2023-12-31 · accession 0001628280-25-010681 (CashAndCashEquivalentsAtCarryingValue)
  9. 40-F · period ending 2024-12-31 · accession 0002019061-26-000006 (CashAndCashEquivalentsAtCarryingValue)