HESS MIDSTREAM LP - CLASS A (HESM) Stock Fundamental Analysis
USA - NYSE:HESM - US4281031058 - Common Stock
34.86 USD
-0.39 (-1.11%)
35 USD
+0.14 (+0.4%)
We assign a fundamental rating of 5 out of 10 to HESM. HESM was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. While HESM belongs to the best of the industry regarding profitability, there are concerns on its financial health. HESM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year HESM was profitable.
In the past year HESM had a positive cash flow from operations.
HESM had positive earnings in each of the past 5 years.
In the past 5 years HESM always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 6.58%, HESM is doing good in the industry, outperforming 71.90% of the companies in the same industry.
HESM has a Return On Equity of 45.81%. This is amongst the best in the industry. HESM outperforms 94.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 18.25%, HESM belongs to the top of the industry, outperforming 95.24% of the companies in the same industry.
HESM had an Average Return On Invested Capital over the past 3 years of 18.24%. This is below the industry average of 21.71%.
The 3 year average ROIC (18.24%) for HESM is below the current ROIC(18.25%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.58% | ||
| ROE | 45.81% | ||
| ROIC | 18.25% |
ROA(3y)3.61%
ROA(5y)2.58%
ROE(3y)37.04%
ROE(5y)30.61%
ROIC(3y)18.24%
ROIC(5y)17.21%
1.3 Margins
With a decent Profit Margin value of 18.52%, HESM is doing good in the industry, outperforming 72.38% of the companies in the same industry.
HESM's Profit Margin has improved in the last couple of years.
HESM has a better Operating Margin (61.91%) than 93.81% of its industry peers.
In the last couple of years the Operating Margin of HESM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 61.91% | ||
| PM (TTM) | 18.52% | ||
| GM | N/A |
OM growth 3Y0.57%
OM growth 5Y6.72%
PM growth 3Y57.01%
PM growth 5Y13.67%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
HESM has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HESM has less shares outstanding
The number of shares outstanding for HESM has been reduced compared to 5 years ago.
Compared to 1 year ago, HESM has an improved debt to assets ratio.
2.2 Solvency
HESM has a debt to FCF ratio of 5.57. This is a neutral value as HESM would need 5.57 years to pay back of all of its debts.
HESM has a Debt to FCF ratio of 5.57. This is in the better half of the industry: HESM outperforms 61.90% of its industry peers.
A Debt/Equity ratio of 5.81 is on the high side and indicates that HESM has dependencies on debt financing.
HESM has a worse Debt to Equity ratio (5.81) than 89.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.81 | ||
| Debt/FCF | 5.57 | ||
| Altman-Z | N/A |
ROIC/WACC2.2
WACC8.3%
2.3 Liquidity
HESM has a Current Ratio of 0.71. This is a bad value and indicates that HESM is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of HESM (0.71) is worse than 75.24% of its industry peers.
HESM has a Quick Ratio of 0.71. This is a bad value and indicates that HESM is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of HESM (0.71) is worse than 67.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.39% over the past year.
Measured over the past years, HESM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.34% on average per year.
The Revenue has grown by 9.02% in the past year. This is quite good.
HESM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.01% yearly.
EPS 1Y (TTM)17.39%
EPS 3Y12.26%
EPS 5Y15.34%
EPS Q2Q%25.42%
Revenue 1Y (TTM)9.02%
Revenue growth 3Y7.5%
Revenue growth 5Y12.01%
Sales Q2Q%13.32%
3.2 Future
Based on estimates for the next years, HESM will show a small growth in Earnings Per Share. The EPS will grow by 5.10% on average per year.
Based on estimates for the next years, HESM will show a quite strong growth in Revenue. The Revenue will grow by 9.70% on average per year.
EPS Next Y14.12%
EPS Next 2Y12.98%
EPS Next 3Y12.62%
EPS Next 5Y5.1%
Revenue Next Year12.16%
Revenue Next 2Y11.09%
Revenue Next 3Y9.7%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.91, HESM is valued correctly.
Based on the Price/Earnings ratio, HESM is valued a bit cheaper than 62.86% of the companies in the same industry.
When comparing the Price/Earnings ratio of HESM to the average of the S&P500 Index (27.06), we can say HESM is valued rather cheaply.
The Price/Forward Earnings ratio is 10.97, which indicates a very decent valuation of HESM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HESM indicates a somewhat cheap valuation: HESM is cheaper than 65.24% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of HESM to the average of the S&P500 Index (22.64), we can say HESM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.91 | ||
| Fwd PE | 10.97 |
4.2 Price Multiples
HESM's Enterprise Value to EBITDA is on the same level as the industry average.
HESM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HESM is cheaper than 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.99 | ||
| EV/EBITDA | 9.36 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of HESM may justify a higher PE ratio.
A more expensive valuation may be justified as HESM's earnings are expected to grow with 12.62% in the coming years.
PEG (NY)0.91
PEG (5Y)0.84
EPS Next 2Y12.98%
EPS Next 3Y12.62%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.47%, HESM is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.00, HESM pays a better dividend. On top of this HESM pays more dividend than 80.95% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, HESM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.47% |
5.2 History
On average, the dividend of HESM grows each year by 16.02%, which is quite nice.
HESM has been paying a dividend for over 5 years, so it has already some track record.
As HESM did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)16.02%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
HESM pays out 99.14% of its income as dividend. This is not a sustainable payout ratio.
HESM's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP99.14%
EPS Next 2Y12.98%
EPS Next 3Y12.62%
34.86
-0.39 (-1.11%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners97.07%
Inst Owner Change2.76%
Ins Owners0.24%
Ins Owner Change-40.78%
Market Cap7.32B
Analysts80
Price Target46.51 (33.42%)
Short Float %5.31%
Short Ratio4.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.47% |
Yearly Dividend1.06
Dividend Growth(5Y)16.02%
DP99.14%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.99%
Min EPS beat(2)3%
Max EPS beat(2)8.99%
EPS beat(4)2
Avg EPS beat(4)1%
Min EPS beat(4)-6.17%
Max EPS beat(4)8.99%
EPS beat(8)3
Avg EPS beat(8)-3.14%
EPS beat(12)4
Avg EPS beat(12)-3.08%
EPS beat(16)4
Avg EPS beat(16)-4.2%
Revenue beat(2)1
Avg Revenue beat(2)-0.82%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)0.23%
Revenue beat(4)1
Avg Revenue beat(4)-1%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)0.23%
Revenue beat(8)2
Avg Revenue beat(8)-0.68%
Revenue beat(12)3
Avg Revenue beat(12)-0.88%
Revenue beat(16)5
Avg Revenue beat(16)-0.54%
PT rev (1m)-1.3%
PT rev (3m)3.64%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)-3.88%
EPS NY rev (1m)0%
EPS NY rev (3m)0.39%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)0.52%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.91 | ||
| Fwd PE | 10.97 | ||
| P/S | 4.66 | ||
| P/FCF | 10.99 | ||
| P/OCF | 7.61 | ||
| P/B | 11.53 | ||
| P/tB | 11.53 | ||
| EV/EBITDA | 9.36 |
EPS(TTM)2.7
EY7.75%
EPS(NY)3.18
Fwd EY9.12%
FCF(TTM)3.17
FCFY9.1%
OCF(TTM)4.58
OCFY13.15%
SpS7.48
BVpS3.02
TBVpS3.02
PEG (NY)0.91
PEG (5Y)0.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.58% | ||
| ROE | 45.81% | ||
| ROCE | 23.1% | ||
| ROIC | 18.25% | ||
| ROICexc | 18.27% | ||
| ROICexgc | 18.27% | ||
| OM | 61.91% | ||
| PM (TTM) | 18.52% | ||
| GM | N/A | ||
| FCFM | 42.43% |
ROA(3y)3.61%
ROA(5y)2.58%
ROE(3y)37.04%
ROE(5y)30.61%
ROIC(3y)18.24%
ROIC(5y)17.21%
ROICexc(3y)18.26%
ROICexc(5y)17.23%
ROICexgc(3y)18.26%
ROICexgc(5y)17.23%
ROCE(3y)23.09%
ROCE(5y)21.79%
ROICexcg growth 3Y2.15%
ROICexcg growth 5Y14%
ROICexc growth 3Y2.15%
ROICexc growth 5Y14%
OM growth 3Y0.57%
OM growth 5Y6.72%
PM growth 3Y57.01%
PM growth 5Y13.67%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.81 | ||
| Debt/FCF | 5.57 | ||
| Debt/EBITDA | 3.13 | ||
| Cap/Depr | 143.76% | ||
| Cap/Sales | 18.87% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.7% | ||
| Profit Quality | 229.08% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | N/A |
F-Score7
WACC8.3%
ROIC/WACC2.2
Cap/Depr(3y)132.73%
Cap/Depr(5y)137.73%
Cap/Sales(3y)18.57%
Cap/Sales(5y)19.37%
Profit Quality(3y)522.92%
Profit Quality(5y)870.13%
High Growth Momentum
Growth
EPS 1Y (TTM)17.39%
EPS 3Y12.26%
EPS 5Y15.34%
EPS Q2Q%25.42%
EPS Next Y14.12%
EPS Next 2Y12.98%
EPS Next 3Y12.62%
EPS Next 5Y5.1%
Revenue 1Y (TTM)9.02%
Revenue growth 3Y7.5%
Revenue growth 5Y12.01%
Sales Q2Q%13.32%
Revenue Next Year12.16%
Revenue Next 2Y11.09%
Revenue Next 3Y9.7%
Revenue Next 5YN/A
EBIT growth 1Y11.2%
EBIT growth 3Y8.12%
EBIT growth 5Y19.53%
EBIT Next Year36.76%
EBIT Next 3Y16.98%
EBIT Next 5Y10.78%
FCF growth 1Y6.49%
FCF growth 3Y0.1%
FCF growth 5Y31.01%
OCF growth 1Y11.86%
OCF growth 3Y5.73%
OCF growth 5Y14.84%