Hess Midstream's Distribution Increase Might Change The Case For Investing In HESM

• Hess Midstream's board recently announced an increased quarterly cash distribution of US$0.7548 per Class A share for the third quarter of 2025, marking a US$0.0178 increase over the prior quarter, with the payout set for November 14, 2025, to shareholders of record as of November 6.
• This distribution rise, supported by robust excess free cash flow and recent share repurchases, surpasses the company's targeted annual growth rate and reflects management's confidence in its ongoing financial strength.
• We'll explore how this distribution boost, made possible by strong free cash flow and unit repurchases, influences Hess Midstream's investment narrative.

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Hess Midstream Investment Narrative Recap

Owning Hess Midstream typically appeals to investors who believe in the long-term stability generated by fee-based contracts with Hess Corporation, now under Chevron, and the ability to deliver consistent distributions even as the Bakken basin matures. The newly increased US$0.7548 quarterly distribution is a positive sign of management’s confidence in cash flows, but this news does not materially offset the primary short-term risk: exposure to changes in Chevron’s drilling and capital allocation, which directly impacts throughput volumes.

Among recent developments, Hess Midstream’s US$70 million Class A share buyback completed in the third quarter stands out, as the company directly links this action to the excess cash flow that enabled the higher distribution. This supports the near-term catalyst of capital returns, but does not reduce the ongoing reliance on strong upstream volumes from Chevron. Still, investors should not overlook the potential impact of ...

Read the full narrative on Hess Midstream (it's free!)

Hess Midstream's narrative projects $2.1 billion revenue and $769.1 million earnings by 2028. This requires 9.8% yearly revenue growth and a $478.2 million earnings increase from $290.9 million today.

Uncover how Hess Midstream's forecasts yield a $40.00 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided six fair value estimates for Hess Midstream, ranging widely from US$11.87 to US$66.53 per share. While opinions differ, many point to the company’s reliance on Chevron’s Bakken activity as a key variable that could affect future revenue stability, highlighting the important role of upstream production trends in shaping performance.

Explore 6 other fair value estimates on Hess Midstream - why the stock might be worth as much as 96% more than the current price!

Build Your Own Hess Midstream Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hess Midstream research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Hess Midstream research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hess Midstream's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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