HESS MIDSTREAM LP - CLASS A (HESM) Stock Fundamental Analysis
NYSE:HESM - New York Stock Exchange, Inc. - US4281031058 - Common Stock - Currency: USD
Taking everything into account, HESM scores 5 out of 10 in our fundamental rating. HESM was compared to 213 industry peers in the Oil, Gas & Consumable Fuels industry. HESM has an excellent profitability rating, but there are concerns on its financial health. HESM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
HESM had positive earnings in the past year.
HESM had a positive operating cash flow in the past year.
In the past 5 years HESM has always been profitable.
Each year in the past 5 years HESM had a positive operating cash flow.
1.2 Ratios
HESM has a Return On Assets of 5.87%. This is in the better half of the industry: HESM outperforms 64.79% of its industry peers.
HESM has a better Return On Equity (41.59%) than 93.90% of its industry peers.
HESM's Return On Invested Capital of 18.10% is amongst the best of the industry. HESM outperforms 93.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HESM is significantly below the industry average of 23.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 41.59% | ||
| ROIC | 18.1% |
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
Looking at the Profit Margin, with a value of 16.43%, HESM is in the better half of the industry, outperforming 65.73% 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 (61.40%) than 93.43% of its industry peers.
HESM's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 61.4% | ||
| PM (TTM) | 16.43% | ||
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HESM is creating value.
HESM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HESM has been reduced compared to 5 years ago.
The debt/assets ratio for HESM has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of HESM is 5.41, which is a neutral value as it means it would take HESM, 5.41 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HESM (5.41) is better than 62.44% of its industry peers.
A Debt/Equity ratio of 5.90 is on the high side and indicates that HESM has dependencies on debt financing.
With a Debt to Equity ratio value of 5.90, HESM is not doing good in the industry: 89.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.9 | ||
| Debt/FCF | 5.41 | ||
| Altman-Z | N/A |
ROIC/WACC2.38
WACC7.62%
2.3 Liquidity
A Current Ratio of 0.81 indicates that HESM may have some problems paying its short term obligations.
The Current ratio of HESM (0.81) is worse than 69.01% of its industry peers.
HESM has a Quick Ratio of 0.81. 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 (0.81) is worse than 61.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.38% over the past year.
The Earnings Per Share has been growing by 15.34% on average over the past years. This is quite good.
Looking at the last year, HESM shows a quite strong growth in Revenue. The Revenue has grown by 8.77% in the last year.
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)15.38%
EPS 3Y12.26%
EPS 5Y15.34%
EPS Q2Q%10.17%
Revenue 1Y (TTM)8.77%
Revenue growth 3Y7.5%
Revenue growth 5Y12.01%
Sales Q2Q%7.42%
3.2 Future
Based on estimates for the next years, HESM will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.50% on average per year.
HESM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.50% yearly.
EPS Next Y13.67%
EPS Next 2Y15.29%
EPS Next 3Y13.36%
EPS Next 5Y8.5%
Revenue Next Year11.05%
Revenue Next 2Y11.12%
Revenue Next 3Y9.5%
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.
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
Based on the Price/Earnings ratio of 15.10, the valuation of HESM can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of HESM is on the same level as its industry peers.
HESM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.34.
With a Price/Forward Earnings ratio of 11.63, the valuation of HESM can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HESM indicates a somewhat cheap valuation: HESM is cheaper than 61.03% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.03. HESM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.1 | ||
| Fwd PE | 11.63 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HESM is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HESM indicates a somewhat cheap valuation: HESM is cheaper than 65.73% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.3 | ||
| EV/EBITDA | 10.84 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HESM may justify a higher PE ratio.
HESM's earnings are expected to grow with 13.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.1
PEG (5Y)0.98
EPS Next 2Y15.29%
EPS Next 3Y13.36%
5. Dividend
5.1 Amount
HESM has a Yearly Dividend Yield of 7.36%, which is a nice return.
HESM's Dividend Yield is rather good when compared to the industry average which is at 6.42. HESM pays more dividend than 80.28% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, HESM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.36% |
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.
HESM has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)16.02%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
HESM pays out 103.00% of its income as dividend. This is not a sustainable payout ratio.
The dividend of HESM is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP103%
EPS Next 2Y15.29%
EPS Next 3Y13.36%
38.5
-0.07 (-0.18%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners93.8%
Inst Owner Change12.96%
Ins Owners0.24%
Ins Owner Change1.94%
Market Cap8.78B
Analysts80
Price Target44.88 (16.57%)
Short Float %4.85%
Short Ratio4.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.36% |
Yearly Dividend1.06
Dividend Growth(5Y)16.02%
DP103%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.59%
Min EPS beat(2)-1.82%
Max EPS beat(2)3%
EPS beat(4)1
Avg EPS beat(4)-3.44%
Min EPS beat(4)-8.76%
Max EPS beat(4)3%
EPS beat(8)3
Avg EPS beat(8)-3.96%
EPS beat(12)3
Avg EPS beat(12)-4.27%
EPS beat(16)3
Avg EPS beat(16)-4.78%
Revenue beat(2)0
Avg Revenue beat(2)-1.34%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.53%
Min Revenue beat(4)-1.87%
Max Revenue beat(4)-0.81%
Revenue beat(8)1
Avg Revenue beat(8)-0.9%
Revenue beat(12)2
Avg Revenue beat(12)-0.93%
Revenue beat(16)4
Avg Revenue beat(16)-0.66%
PT rev (1m)0%
PT rev (3m)-1.68%
EPS NQ rev (1m)1.03%
EPS NQ rev (3m)-7.29%
EPS NY rev (1m)1.43%
EPS NY rev (3m)-1.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.96%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.1 | ||
| Fwd PE | 11.63 | ||
| P/S | 5.77 | ||
| P/FCF | 13.3 | ||
| P/OCF | 9.17 | ||
| P/B | 14.61 | ||
| P/tB | 14.61 | ||
| EV/EBITDA | 10.84 |
EPS(TTM)2.55
EY6.62%
EPS(NY)3.31
Fwd EY8.6%
FCF(TTM)2.9
FCFY7.52%
OCF(TTM)4.2
OCFY10.9%
SpS6.67
BVpS2.64
TBVpS2.64
PEG (NY)1.1
PEG (5Y)0.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 41.59% | ||
| ROCE | 22.92% | ||
| ROIC | 18.1% | ||
| ROICexc | 18.13% | ||
| ROICexgc | 18.13% | ||
| OM | 61.4% | ||
| PM (TTM) | 16.43% | ||
| GM | N/A | ||
| FCFM | 43.41% |
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 | 5.9 | ||
| Debt/FCF | 5.41 | ||
| Debt/EBITDA | 3.11 | ||
| Cap/Depr | 144.92% | ||
| Cap/Sales | 19.5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.04% | ||
| Profit Quality | 264.13% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | N/A |
F-Score7
WACC7.62%
ROIC/WACC2.38
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)15.38%
EPS 3Y12.26%
EPS 5Y15.34%
EPS Q2Q%10.17%
EPS Next Y13.67%
EPS Next 2Y15.29%
EPS Next 3Y13.36%
EPS Next 5Y8.5%
Revenue 1Y (TTM)8.77%
Revenue growth 3Y7.5%
Revenue growth 5Y12.01%
Sales Q2Q%7.42%
Revenue Next Year11.05%
Revenue Next 2Y11.12%
Revenue Next 3Y9.5%
Revenue Next 5YN/A
EBIT growth 1Y9.9%
EBIT growth 3Y8.12%
EBIT growth 5Y19.53%
EBIT Next Year35.7%
EBIT Next 3Y16.36%
EBIT Next 5Y10.39%
FCF growth 1Y6.29%
FCF growth 3Y0.1%
FCF growth 5Y31.01%
OCF growth 1Y10.15%
OCF growth 3Y5.73%
OCF growth 5Y14.84%