South Bow - A Spinoff With Attractive Total Return Prospects
Note: Dollar figures in this article refer to Canadian dollars.
South Bow Corp. (SOBO:CA) is a liquids pipeline operator that was spun off from TC Energy (TRP:CA) through a transaction in which each TRP shareholder received one SOBO share and five TRP shares. The spinoff was completed today. SOBO shares now trade on the Toronto Stock Exchange. They are expected to trade on the New York Sock Exchange by October 8, also under the "SOBO" ticker.
A snapshot of the company is shown below.
Source: South Bow Investor Presentation.
At its current stock price of $29.00, SOBO’s $2.70 annual dividend generates a safe and attractive 9.3% yield.
We’ve held TRP shares in our HFIR Energy Income Portfolio since August 1, 2023, when we purchased shares at $34.15, so we received SOBO shares in the spinoff. We intend to hold onto the shares until something more attractive comes along.