Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $7.03B
• Dividend Yield: 8.52%
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.52
• Revenue Growth: 10.78%
• EPS Growth: 19.10%
• Country: US
• Employees: 176
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.75
• Shares Outstanding: 129,392,380
• 10 Day Avg. Volume: 1,548,465
• 30 Day Avg. Volume: 1,610,946
• PEG Ratio: 0.78
• Price to Book (P/B): 6.21
• Price to Sales (P/S): 2.21
• P/FCF Ratio: 5.20
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $36.40
• Price Target Upside: 6.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.79
• Revenue Forecast (FY): $1.64B

• Rating: 77 Outperform
• Price Target: $39.00 ▲(14.44% Upside)

Hess Midstream's strong financial performance and attractive valuation are key strengths, supported by high profitability and a robust dividend yield. The earnings call reflects solid operational execution, although high leverage and project suspensions pose risks. Technical indicators suggest mixed momentum, with short-term strength but longer-term caution.

Positive Factors

Revenue Model Stability

The reliance on long-term, take-or-pay contracts ensures stable cash flow, insulating the company from commodity price volatility and providing predictable revenue streams.

Operational Efficiency

High EBITDA margins reflect strong operational leverage and efficiency, allowing the company to maintain profitability even in fluctuating market conditions.

Cash Flow Generation

Strong free cash flow generation supports dividend growth and provides financial flexibility for future investments or debt reduction, enhancing long-term shareholder value.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, especially if market conditions worsen, potentially impacting future growth and stability.

Project Suspension

Halting the Capa gas plant project may constrain future capacity expansion and revenue growth, affecting long-term strategic positioning in the market.

Slowed Revenue Growth

Slowing revenue growth could indicate market saturation or increased competition, potentially impacting the company's ability to sustain long-term growth momentum.

Hess Midstream Partners Business Overview & Revenue Model

Company Description

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 compression; crude oil gathering systems; and produced water gathering and disposal facilities. Its gathering systems consists of approximately 1,350 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 450 million cubic feet per day; and crude oil gathering system comprises approximately 550 miles of crude oil gathering pipelines. The Processing and Storage segment comprises Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; a 50% interest in the Little Missouri 4 gas processing plant located in south of the Missouri River in McKenzie County, North Dakota; and Mentor Storage Terminal, a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota. The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; and crude oil rail cars, as well as Johnson's Corner Header System, a crude oil pipeline header system. Hess Midstream LP was founded in 2014 and is based in Houston, Texas.

How the Company Makes Money

Hess Midstream Partners generates revenue primarily through fee-based contracts for its midstream services, which include gathering, processing, and transporting crude oil and natural gas. The company's revenue model is largely dependent on long-term, take-or-pay contracts with its customers, which ensure a steady cash flow regardless of commodity price fluctuations. Key revenue streams include fees from the transportation of crude oil and natural gas, processing fees from natural gas and NGLs, and storage fees for hydrocarbons. Additionally, partnerships with major energy producers, such as Hess Corporation, provide a stable customer base and contribute significantly to HESM's earnings. The company's strategic asset base and operational efficiency further enhance its profitability.

Hess Midstream Partners Financial Statement Overview

Summary

Hess Midstream Partners shows strong profitability and cash flow generation, with high margins and efficient operations. However, the high debt-to-equity ratio indicates significant leverage, which poses a potential risk.

Income Statement

Hess Midstream Partners demonstrates strong profitability with a high gross profit margin of 86.8% and a solid net profit margin of 18.6% for the TTM. Revenue growth is positive at 3.2%, indicating steady expansion. The EBIT and EBITDA margins are robust at 63.0% and 76.2% respectively, showcasing efficient operations. Overall, the income statement reflects a healthy financial performance with consistent growth and profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 5.85, indicating significant leverage, which could pose a risk if not managed properly. However, the return on equity is strong at 50.6%, suggesting effective use of equity to generate profits. The equity ratio stands at 14.4%, reflecting a moderate level of equity financing. While profitability is strong, the high leverage warrants caution.

Cash Flow

Cash flow analysis shows a substantial free cash flow growth rate of 87.8% for the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is high at 4.51, suggesting efficient cash conversion. The free cash flow to net income ratio is healthy at 69.2%, highlighting the company's ability to generate cash relative to its net income. Overall, cash flow metrics are strong, supporting the company's financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.61B	1.49B	1.35B	1.27B	1.20B	1.09B
Gross Profit	1.30B	1.29B	1.15B	1.09B	1.04B	934.70M
EBITDA	1.23B	1.14B	1.02B	977.80M	903.40M	743.60M
Net Income	330.00M	223.10M	118.60M	83.90M	46.40M	24.00M
Balance Sheet
Total Assets	4.44B	4.15B	3.79B	3.59B	3.49B	3.37B
Cash, Cash Equivalents and Short-Term Investments	5.50M	4.30M	5.40M	3.10M	2.20M	2.60M
Total Debt	3.79B	3.47B	3.21B	2.89B	2.56B	1.91B
Total Liabilities	4.01B	3.69B	3.43B	3.06B	2.73B	2.05B
Stockholders Equity	572.50M	530.70M	340.20M	245.10M	204.10M	125.00M
Cash Flow
Free Cash Flow	712.70M	634.20M	642.90M	622.90M	632.30M	340.60M
Operating Cash Flow	996.70M	940.30M	866.40M	861.10M	795.50M	641.70M
Investing Cash Flow	-284.00M	-306.10M	-223.50M	-238.20M	-163.20M	-301.00M
Financing Cash Flow	-717.50M	-635.30M	-640.60M	-622.00M	-632.70M	-341.40M

Hess Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 34.08
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HESM, the sentiment is Neutral. The current price of 34.08 is above the 20-day moving average (MA) of 33.94, above the 50-day MA of 33.28, and below the 200-day MA of 36.39, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 52.48 is Neutral, neither overbought nor oversold. The STOCH value of 11.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HESM.

Hess Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WES	80 Outperform	$15.94B	11.56	40.29%	9.12%	5.81%	-13.58%
PAA	79 Outperform	$12.38B	14.23	9.78%	8.61%	-7.53%	9.74%
AM	78 Outperform	$8.34B	17.95	22.52%	5.10%	8.70%	21.42%
DTM	78 Outperform	$12.00B	29.92	9.04%	2.74%	20.39%	-3.85%
HESM	77 Outperform	$7.03B	12.03	59.81%	8.52%	10.78%	19.10%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
KNTK	52 Neutral	$5.43B	82.87	―	9.03%	15.00%	-84.96%

Hess Midstream Partners Corporate Events

Hess Midstream Partners Announces Board Changes

On December 4, 2025, Hess Midstream Partners, a company managed by Hess Midstream GP LLC, announced changes in its Board of Directors. Andrew B. Walz resigned from the Board following his appointment as an executive officer at Chevron Corporation. His resignation was not due to any disagreements with the company. Kristi H. McCarthy was designated as the new Chairman of the Board, and Barbara F. Harrison, a vice president at Chevron U.S.A. Inc., was appointed as a new board member. Harrison’s appointment aligns with Chevron’s influence over the board, as Chevron indirectly owns the entities controlling Hess Midstream Partners.