Hess Midstream LP (NYSE: HESM)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001789832
Market Cap 3.96 Bn
P/B 6.92
P/E 12.00
P/S 2.46
ROIC (Qtr) 17.34
Div Yield % 10.59
Rev 1y % (Qtr) 11.20
Total Debt (Qtr) 3.79 Bn
Debt/Equity (Qtr) 6.63

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 996.70M provides strong 474.62x coverage of stock compensation 2.10M, indicating sustainable incentive practices.
  • Strong operating cash flow of 996.70M provides 31.34x coverage of SG&A expenses 31.80M, showing efficient operational cost management.
  • Robust free cash flow of 712.70M exceeds capital expenditure of 284M by 2.51x, indicating strong organic growth funding capability.
  • Operating cash flow of 996.70M provides solid 4.44x coverage of current liabilities 224.30M, showing strong operational health.
  • Operating cash flow of 996.70M provides strong 1993.40x coverage of tax liabilities 500000, showing excellent fiscal position.

Bear case

  • Operating cash flow of 996.70M barely covers its investment activities of (284M), with a coverage ratio of -3.51, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 996.70M provides thin coverage of dividend payments of (323.90M) with a -3.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High financing cash flow of (717.50M) relative to working capital of (56.10M), which is 12.79x suggests concerning dependence on external funding for operational needs.
  • Cash position of 5.50M provides weak coverage of payables of 93.40M, which is 0.06x, indicating potential working capital stress and supplier relationship risks.
  • Operating cash flow of 996.70M shows concerning coverage of minority interest expenses of 358.70M, which is 2.78x, suggesting complex corporate structure risks.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 100.05 Bn 24.60 2.15 75.15 Bn
2 WMB Williams Companies, Inc. 73.60 Bn 31.09 6.40 27.99 Bn
3 EPD Enterprise Products Partners L.P. 69.94 Bn 12.09 1.32 33.58 Bn
4 KMI Kinder Morgan, Inc. 60.62 Bn 22.23 3.69 32.58 Bn
5 ET Energy Transfer LP 58.05 Bn 13.46 0.73 63.97 Bn
6 TRP Tc Energy Corp 55.97 Bn 22.78 5.27 44.47 Bn
7 MPLX Mplx Lp 54.03 Bn 11.23 4.22 25.92 Bn
8 OKE Oneok Inc /New/ 44.55 Bn 13.34 1.41 33.73 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.73 3.39
EV to Cash from Ops. EV/CFO 7.70 7.77
EV to Debt EV to Debt 2.02 -68.56
EV to EBIT EV/EBIT 11.67 12.77
EV to EBITDA EV/EBITDA 6.34 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 10.76 13.20
EV to Market Cap EV to Market Cap 1.94 2.49
EV to Revenue EV/Rev 4.76 4.48
Price to Book Value [P/B] P/B 6.92 94.01
Price to Earnings [P/E] P/E 12.00 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.02 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 100.20 72.05
Dividend per Basic Share Div per Share (Qtr) 2.84 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 51.86 32.66
Interest Coverage Int. cover (Qtr) 2.97 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.46 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -46.60 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) 45.49 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 46.30 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.25 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) 46.36 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) 73.58 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) 19.41 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) 8.83 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.59 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.36 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.25 0.21
Cash Ratio Cash Ratio (Qtr) 0.02 0.81
Current Ratio Curr Ratio (Qtr) 0.75 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 6.63 1.11
Interest Cover Ratio Int Coverage (Qtr) 2.97 5.11
Times Interest Earned Times Interest Earned (Qtr) 2.97 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 53.80 35.86
EBIT Margin % EBIT Margin % (Qtr) 40.75 27.76
EBT Margin % EBT Margin % (Qtr) 27.04 17.28
Gross Margin % Gross Margin % (Qtr) 77.00 48.56
Net Profit Margin % Net Margin % (Qtr) 20.50 15.36