Q: What is the difference between TRP and SOBO? Which one would be most effected by the current tariffs? Which one would you prefer for income account?
5i Research Answer:
TRP is a leading energy infrastructure company that specializes in natural gas pipelines and power and energy solutions. SOBO is dedicated to the transportation of crude oil, with about 4,900 km of pipeline infrastructure. We feel that SOBO is likely to be more impacted by tariffs.
TRP is a $66.6B company, trading at 16.9X forward earnings and with a 5.3% yield. SOBO is a $6.6B company, trading at 14X forward earnings and with a 8.7% yield. For an income account, we would be more comfortable with TRP given its larger size and longer history in the public markets, but for an investor seeking higher growth mixed with yield, we would give SOBO the slight edge today.