Hess Corporation (HES) Stock Fundamental Analysis
NYSE:HES - New York Stock Exchange, Inc. - US42809H1077 - Common Stock - Currency: USD
HES gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 210 industry peers in the Oil, Gas & Consumable Fuels industry. While HES belongs to the best of the industry regarding profitability, there are concerns on its financial health. HES is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year HES was profitable.
In the past year HES had a positive cash flow from operations.
Of the past 5 years HES 4 years were profitable.
Each year in the past 5 years HES had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.21%, HES is in the better half of the industry, outperforming 78.10% of the companies in the same industry.
HES has a better Return On Equity (19.33%) than 83.81% of its industry peers.
With an excellent Return On Invested Capital value of 12.13%, HES belongs to the best of the industry, outperforming 86.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for HES is significantly below the industry average of 23.80%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.21% | ||
| ROE | 19.33% | ||
| ROIC | 12.13% |
ROA(3y)8.62%
ROA(5y)2.43%
ROE(3y)22.25%
ROE(5y)3.6%
ROIC(3y)12.85%
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 17.82%, HES is doing good in the industry, outperforming 69.05% of the companies in the same industry.
In the last couple of years the Profit Margin of HES has grown nicely.
HES has a better Operating Margin (33.02%) than 74.76% of its industry peers.
In the last couple of years the Operating Margin of HES has grown nicely.
With an excellent Gross Margin value of 77.56%, HES belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
HES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.02% | ||
| PM (TTM) | 17.82% | ||
| GM | 77.56% |
OM growth 3Y11.29%
OM growth 5Y32.64%
PM growth 3Y42.12%
PM growth 5YN/A
GM growth 3Y3.38%
GM growth 5Y2.03%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so HES is still creating some value.
Compared to 1 year ago, HES has more shares outstanding
Compared to 5 years ago, HES has more shares outstanding
The debt/assets ratio for HES has been reduced compared to a year ago.
2.2 Solvency
HES has an Altman-Z score of 2.99. This is not the best score and indicates that HES is in the grey zone with still only limited risk for bankruptcy at the moment.
HES's Altman-Z score of 2.99 is amongst the best of the industry. HES outperforms 82.38% of its industry peers.
The Debt to FCF ratio of HES is 7.90, which is on the high side as it means it would take HES, 7.90 years of fcf income to pay off all of its debts.
HES has a Debt to FCF ratio (7.90) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.76 indicates that HES is somewhat dependend on debt financing.
The Debt to Equity ratio of HES (0.76) is worse than 63.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 7.9 | ||
| Altman-Z | 2.99 |
ROIC/WACC1.37
WACC8.86%
2.3 Liquidity
HES has a Current Ratio of 1.08. This is a normal value and indicates that HES is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.08, HES is in line with its industry, outperforming 46.19% of the companies in the same industry.
A Quick Ratio of 0.91 indicates that HES may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.91, HES is in line with its industry, outperforming 47.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.66% over the past year.
HES shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 64.11% yearly.
HES shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.55%.
Measured over the past years, HES shows a quite strong growth in Revenue. The Revenue has been growing by 14.70% on average per year.
EPS 1Y (TTM)17.66%
EPS 3Y64.11%
EPS 5YN/A
EPS Q2Q%-42.72%
Revenue 1Y (TTM)9.55%
Revenue growth 3Y19.95%
Revenue growth 5Y14.7%
Sales Q2Q%-12.06%
3.2 Future
Based on estimates for the next years, HES will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.19% on average per year.
The Revenue is expected to grow by 7.19% on average over the next years.
EPS Next Y-35.51%
EPS Next 2Y-7.46%
EPS Next 3Y8.11%
EPS Next 5Y11.19%
Revenue Next Year-12.35%
Revenue Next 2Y0.34%
Revenue Next 3Y6.16%
Revenue Next 5Y7.19%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.88, which indicates a rather expensive current valuation of HES.
Compared to the rest of the industry, the Price/Earnings ratio of HES is on the same level as its industry peers.
HES's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.69.
HES is valuated rather expensively with a Price/Forward Earnings ratio of 17.97.
HES's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 37.36. HES is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.88 | ||
| Fwd PE | 17.97 |
4.2 Price Multiples
HES's Enterprise Value to EBITDA is on the same level as the industry average.
HES's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.32 | ||
| EV/EBITDA | 8.02 |
4.3 Compensation for Growth
HES has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-7.46%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.34%, HES has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.49, HES is paying slightly less dividend.
With a Dividend Yield of 1.34, HES pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
5.2 History
The dividend of HES is nicely growing with an annual growth rate of 12.15%!
HES has paid a dividend for at least 10 years, which is a reliable track record.
HES has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.15%
Div Incr Years3
Div Non Decr Years34
5.3 Sustainability
HES pays out 26.90% of its income as dividend. This is a sustainable payout ratio.
HES's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP26.9%
EPS Next 2Y-7.46%
EPS Next 3Y8.11%
148.97
+1.42 (+0.96%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners78.07%
Inst Owner Change-0.55%
Ins Owners8.84%
Ins Owner Change-251.45%
Market Cap46.07B
Analysts74
Price Target164.07 (10.14%)
Short Float %2.69%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
Yearly Dividend1.88
Dividend Growth(5Y)12.15%
DP26.9%
Div Incr Years3
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.68%
Min EPS beat(2)11.23%
Max EPS beat(2)18.14%
EPS beat(4)4
Avg EPS beat(4)13.4%
Min EPS beat(4)4.48%
Max EPS beat(4)19.75%
EPS beat(8)8
Avg EPS beat(8)28.25%
EPS beat(12)11
Avg EPS beat(12)19.9%
EPS beat(16)15
Avg EPS beat(16)19.88%
Revenue beat(2)2
Avg Revenue beat(2)9.14%
Min Revenue beat(2)7.15%
Max Revenue beat(2)11.13%
Revenue beat(4)4
Avg Revenue beat(4)9.07%
Min Revenue beat(4)5.82%
Max Revenue beat(4)12.18%
Revenue beat(8)8
Avg Revenue beat(8)12.91%
Revenue beat(12)12
Avg Revenue beat(12)13.99%
Revenue beat(16)16
Avg Revenue beat(16)15.83%
PT rev (1m)1.28%
PT rev (3m)-5.3%
EPS NQ rev (1m)1.53%
EPS NQ rev (3m)-24.19%
EPS NY rev (1m)0.95%
EPS NY rev (3m)-6.27%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)-6.17%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)-6.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.88 | ||
| Fwd PE | 17.97 | ||
| P/S | 3.69 | ||
| P/FCF | 41.32 | ||
| P/OCF | 7.53 | ||
| P/B | 4 | ||
| P/tB | 4.13 | ||
| EV/EBITDA | 8.02 |
EPS(TTM)8.33
EY5.59%
EPS(NY)8.29
Fwd EY5.57%
FCF(TTM)3.61
FCFY2.42%
OCF(TTM)19.78
OCFY13.27%
SpS40.41
BVpS37.25
TBVpS36.09
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.21% | ||
| ROE | 19.33% | ||
| ROCE | 16.99% | ||
| ROIC | 12.13% | ||
| ROICexc | 12.83% | ||
| ROICexgc | 13.03% | ||
| OM | 33.02% | ||
| PM (TTM) | 17.82% | ||
| GM | 77.56% | ||
| FCFM | 8.92% |
ROA(3y)8.62%
ROA(5y)2.43%
ROE(3y)22.25%
ROE(5y)3.6%
ROIC(3y)12.85%
ROIC(5y)N/A
ROICexc(3y)14.1%
ROICexc(5y)N/A
ROICexgc(3y)14.37%
ROICexgc(5y)N/A
ROCE(3y)18.01%
ROCE(5y)N/A
ROICexcg growth 3Y15.5%
ROICexcg growth 5Y44.85%
ROICexc growth 3Y15.83%
ROICexc growth 5Y44.98%
OM growth 3Y11.29%
OM growth 5Y32.64%
PM growth 3Y42.12%
PM growth 5YN/A
GM growth 3Y3.38%
GM growth 5Y2.03%
F-Score6
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 7.9 | ||
| Debt/EBITDA | 1.32 | ||
| Cap/Depr | 196.2% | ||
| Cap/Sales | 40.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.61% | ||
| Profit Quality | 50.07% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 2.99 |
F-Score6
WACC8.86%
ROIC/WACC1.37
Cap/Depr(3y)186.56%
Cap/Depr(5y)155.99%
Cap/Sales(3y)33.83%
Cap/Sales(5y)34.39%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.66%
EPS 3Y64.11%
EPS 5YN/A
EPS Q2Q%-42.72%
EPS Next Y-35.51%
EPS Next 2Y-7.46%
EPS Next 3Y8.11%
EPS Next 5Y11.19%
Revenue 1Y (TTM)9.55%
Revenue growth 3Y19.95%
Revenue growth 5Y14.7%
Sales Q2Q%-12.06%
Revenue Next Year-12.35%
Revenue Next 2Y0.34%
Revenue Next 3Y6.16%
Revenue Next 5Y7.19%
EBIT growth 1Y11.3%
EBIT growth 3Y33.49%
EBIT growth 5Y52.14%
EBIT Next Year25.05%
EBIT Next 3Y24.03%
EBIT Next 5Y27.46%
FCF growth 1Y-35.25%
FCF growth 3Y-16.98%
FCF growth 5YN/A
OCF growth 1Y29.08%
OCF growth 3Y24.67%
OCF growth 5Y27.81%