Hess Midstream LP
Hess Midstream LP Fundamental Analysis
Hess Midstream LP (HESM) shows strong financial fundamentals with a PE ratio of 14.29, profit margin of 21.79%, and ROE of 59.38%. The company generates $2.6B in annual revenue with strong year-over-year growth of 10.89%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 56.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze HESM's fundamental strength across five key dimensions:
Efficiency Score
WeakHESM struggles to generate sufficient returns from assets.
Valuation Score
ModerateHESM shows balanced valuation metrics.
Growth Score
ExcellentHESM delivers strong and consistent growth momentum.
Financial Health Score
WeakHESM carries high financial risk with limited liquidity.
Profitability Score
ExcellentHESM achieves industry-leading margins.
Key Financial Metrics
Is HESM Expensive or Cheap?
P/E Ratio
HESM trades at 14.29 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HESM's PEG of 10.07 indicates potential overvaluation.
Price to Book
The market values Hess Midstream LP at 8.87 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 3.51 times EBITDA. This is generally considered low.
How Well Does HESM Make Money?
Net Profit Margin
For every $100 in sales, Hess Midstream LP keeps $21.79 as profit after all expenses.
Operating Margin
Core operations generate 62.24 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $59.38 in profit for every $100 of shareholder equity.
ROA
Hess Midstream LP generates $8.04 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Hess Midstream LP generates strong operating cash flow of $1.58B, reflecting robust business health.
Free Cash Flow
Hess Midstream LP generates strong free cash flow of $941.75M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.52 in free cash annually.
FCF Yield
HESM converts 7.22% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.29
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
10.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.87
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.01
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
6.64
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.59
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.24
vs 25 benchmark
How HESM Stacks Against Its Sector Peers
| Metric | HESM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.29 | 19.95 | Better (Cheaper) |
| ROE | 59.38% | 963.00% | Weak |
| Net Margin | 21.79% | -48347.00% (disorted) | Strong |
| Debt/Equity | 6.64 | -0.54 (disorted) | Distorted |
| Current Ratio | 0.85 | 4.82 | Weak Liquidity |
| ROA | 8.04% | -2296.00% (disorted) | Weak |
HESM outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Hess Midstream LP's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
8.15%
Industry Style: Cyclical, Value, Commodity
GrowingEPS CAGR
-56.92%
Industry Style: Cyclical, Value, Commodity
DecliningFCF CAGR
22.55%
Industry Style: Cyclical, Value, Commodity
High Growth