Hess Midstream LP (HESM) stands out in the energy sector, particularly for individual investors seeking a combination of steady income and significant growth potential. Nestled within the oil and gas midstream industry, Hess Midstream LP operates in the United States, boasting a substantial market cap of $8.39 billion. This powerhouse offers vital services through its three core segments: Gathering, Processing and Storage, and Terminaling and Export, providing a comprehensive suite of fee-based services not only to its parent company, Hess Corporation, but also to third-party customers.
Currently trading at $36.78, HESM’s stock price has remained stable, showing a negligible price change of -0.14, and sits comfortably within its 52-week range of $33.48 to $43.88. This stability is further emphasized by its technical indicators, where the 50-day moving average is at $40.43 and the 200-day moving average at $37.75. The RSI (14) of 50.20 suggests that the stock is neither overbought nor oversold, presenting a balanced technical outlook.
A particularly enticing aspect of Hess Midstream LP for dividend-seeking investors is its impressive dividend yield of 7.35%. However, potential investors should be aware of the elevated payout ratio of 105.95%, which indicates that the company is paying out more in dividends than it earns. This could raise sustainability concerns, though it also highlights the company’s commitment to returning value to shareholders.
Despite a non-available P/E ratio, Hess Midstream’s forward P/E of 9.97 suggests a potentially undervalued position relative to future earnings. This is bolstered by a noteworthy revenue growth rate of 11.10%, reflecting the company’s robust operational performance. The EPS stands at 2.49, and a remarkable return on equity of 159.08% underscores the company’s efficient use of equity capital to generate profits.
Analyst ratings further paint a positive picture for HESM, with three buy ratings and two hold ratings, and no sell ratings. The stock’s target price range is set between $42.00 and $48.00, with an average target of $44.60. This implies a potential upside of 21.26% from its current price, making it an attractive proposition for growth-focused investors.
Investors should note the company’s financial health, underscored by a free cash flow of $341.8 million, which provides a buffer for continued operational investments and potential dividend support.
Hess Midstream LP’s strategic operations include approximately 1,415 miles of natural gas gathering pipelines and additional infrastructure for crude oil and produced water, positioning it as a crucial player in the energy logistics space. The company’s infrastructure assets, such as the Tioga Gas Plant and the Mentor Storage Terminal, further cement its role in the midstream sector.
Founded in 2014 and based in Houston, Texas, Hess Midstream LP continues to leverage its strategic assets and industry expertise to deliver value to its stakeholders. With a forward-looking approach and a strong foundation, Hess Midstream LP remains a compelling option for investors aiming to harness steady income and capitalize on growth opportunities within the energy sector.
