HESM

Hess MidstreamNYSE:HESM Stock Report

Market Cap

US$6.6b

7D

-1.4%

1Y

54.8%

Updated

19 Sep, 2021

Data

Company Financials +
HESM fundamental analysis
Snowflake Score
Valuation2/6
Future Growth2/6
Past Performance1/6
Financial Health2/6
Dividends2/6

HESM Overview

Hess Midstream LP owns, develops, operates, and acquires midstream assets.

Hess Midstream Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hess Midstream
Historical stock prices
Current Share PriceUS$25.87
52 Week HighUS$14.56
52 Week LowUS$27.62
Beta2.23
1 Month Change9.06%
3 Month Change-0.23%
1 Year Change54.82%
3 Year Change13.07%
5 Year Changen/a
Change since IPO1.06%

Recent News & Updates

Aug 31

Hess: Another Discovery Or Two

Two more wells found oil and are drilling for deeper targets. The breakeven of the projects is among the best in the industry. Production growth for several years is assured from the discoveries already made. The unconventional business has become very competitive with the offshore business. The higher cash flow in the current year has sharply reduced the need to raise cash.

Aug 20

Hess Midstream: A Big Distribution Increase And Even Bigger Unit Buybacks

Hess Midstream has marked 2021 as a year of rewarding unitholders with an announcement of a big 11%+ distribution increase and even bigger unit buybacks of $750m. Their financial results for the first half of 2021 have been very impressive with their operating cash flow increasing by over 20% year-on-year. Their unit buybacks will remove approximately 11% of their units and thus means that their higher distributions will not cost any more overall. This leaves ample excess free cash flow to send their distributions even higher in the future, especially given their favorable earnings outlook for 2022 and 2023. Since they show a clear desire to reward their unitholders, it seems very likely that these solid fundamentals will keep their distributions growing and thus my bullish rating remains appropriate.

Aug 11

Hess Corporation: High Tech Growth Pace At An Oil Company Price

The demand for oil is very likely to grow. Hess, therefore, has a very bright future given the Guyana partnership with Exxon Mobil. Cash flow growth in the next five years is very likely to surprise the market. That growth is unlikely to slow in the near future. The Guyana discoveries already made will grow cash flow at least through the end of the decade. The next platform begins production in the first half of 2022.

Jul 31
Hess Midstream (NYSE:HESM) Is Increasing Its Dividend To US$0.50

Hess Midstream (NYSE:HESM) Is Increasing Its Dividend To US$0.50

Hess Midstream LP ( NYSE:HESM ) will increase its dividend on the 13th of August to US$0.50. This will take the...

Jun 07
Is Hess Midstream (NYSE:HESM) A Risky Investment?

Is Hess Midstream (NYSE:HESM) A Risky Investment?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Shareholder Returns

HESMUS Oil and GasUS Market
7D-1.4%2.8%-0.6%
1Y54.8%52.5%33.8%

Return vs Industry: HESM exceeded the US Oil and Gas industry which returned 52.5% over the past year.

Return vs Market: HESM exceeded the US Market which returned 33.8% over the past year.

Price Volatility

Is HESM's price volatile compared to industry and market?
HESM volatility
HESM Beta2.23
Industry Beta1.82
Market Beta1

Stable Share Price: HESM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HESM's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2014n/aJohn Hesshttps://www.hessmidstream.com

Hess Midstream LP owns, develops, operates, and acquires midstream assets. The company operates through three segments: Gathering; Processing and Storage; and Terminaling and Export. The Gathering segment owns natural gas gathering and crude oil gathering systems; and produced water gathering and disposal facilities.

Hess Midstream Fundamentals Summary

How do Hess Midstream's earnings and revenue compare to its market cap?
HESM fundamental statistics
Market CapUS$6.55b
Earnings (TTM)US$31.80m
Revenue (TTM)US$1.11b

206.1x

P/E Ratio

5.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HESM income statement (TTM)
RevenueUS$1.11b
Cost of RevenueUS$273.90m
Gross ProfitUS$841.00m
ExpensesUS$809.20m
EarningsUS$31.80m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.58
Gross Margin75.43%
Net Profit Margin2.85%
Debt/Equity Ratio129.2%

How did HESM perform over the long term?

See historical performance and comparison

Dividends

7.8%

Current Dividend Yield

117%

Payout Ratio

Valuation

Is Hess Midstream undervalued compared to its fair value and its price relative to the market?

35.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HESM ($25.87) is trading below our estimate of fair value ($40.34)

Significantly Below Fair Value: HESM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HESM is poor value based on its PE Ratio (206.1x) compared to the US Oil and Gas industry average (18.2x).

PE vs Market: HESM is poor value based on its PE Ratio (206.1x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: HESM is poor value based on its PEG Ratio (12.1x)


Price to Book Ratio

PB vs Industry: HESM is overvalued based on its PB Ratio (35.6x) compared to the US Oil and Gas industry average (1.8x).


Future Growth

How is Hess Midstream forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

17.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HESM's forecast earnings growth (17.1% per year) is above the savings rate (2%).

Earnings vs Market: HESM's earnings (17.1% per year) are forecast to grow faster than the US market (14.8% per year).

High Growth Earnings: HESM's earnings are forecast to grow, but not significantly.

Revenue vs Market: HESM's revenue (7.7% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: HESM's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HESM's Return on Equity is forecast to be low in 3 years time (18%).


Past Performance

How has Hess Midstream performed over the past 5 years?

-39.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HESM has high quality earnings.

Growing Profit Margin: HESM's current net profit margins (2.9%) are lower than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: HESM's earnings have declined by 39.1% per year over the past 5 years.

Accelerating Growth: HESM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HESM had negative earnings growth (-30%) over the past year, making it difficult to compare to the Oil and Gas industry average (-19.4%).


Return on Equity

High ROE: Whilst HESM's Return on Equity (40.16%) is outstanding, this metric is skewed due to their high level of debt.


Financial Health

How is Hess Midstream's financial position?


Financial Position Analysis

Short Term Liabilities: HESM's short term assets ($110.4M) do not cover its short term liabilities ($127.0M).

Long Term Liabilities: HESM's short term assets ($110.4M) do not cover its long term liabilities ($1.8B).


Debt to Equity History and Analysis

Debt Level: HESM's debt to equity ratio (129.2%) is considered high.

Reducing Debt: Insufficient data to determine if HESM's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: HESM's debt is well covered by operating cash flow (39%).

Interest Coverage: HESM's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet


Dividend

What is Hess Midstream current dividend yield, its reliability and sustainability?

7.80%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HESM's dividend (7.8%) is higher than the bottom 25% of dividend payers in the US market (1.33%).

High Dividend: HESM's dividend (7.8%) is in the top 25% of dividend payers in the US market (3.6%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HESM has been paying a dividend for less than 10 years.

Growing Dividend: HESM's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (116.7%), HESM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HESM's dividends in 3 years are not forecast to be well covered by earnings (101.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.2yrs

Average management tenure


CEO

John Hess (67 yo)

7.17yrs

Tenure

Mr. John B. Hess has been the Chief Executive Officer at Hess Corporation since May 3, 1995. Mr. Hess has been the Chairman of the Board of Directors and Chief Executive Officer of Hess Midstream GP LLC, t...


Leadership Team

Experienced Management: HESM's management team is seasoned and experienced (7.2 years average tenure).


Board Members

Experienced Board: HESM's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Hess Midstream LP's employee growth, exchange listings and data sources


Key Information

  • Name: Hess Midstream LP
  • Ticker: HESM
  • Exchange: NYSE
  • Founded: 2014
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Implied Market Cap: US$6.553b
  • Market Cap: US$647.744m
  • Shares outstanding: 253.31m
  • Website: https://www.hessmidstream.com

Location

  • Hess Midstream LP
  • 1501 McKinney Street
  • Houston
  • Texas
  • 77010
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/19 22:15
End of Day Share Price2021/09/17 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.