Hess Midstream LP (HESM) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Hess Midstream LP (HESM) Energy Operations & Outlook

Hess Midstream LP (HESM) focuses on owning, developing, and operating midstream assets in the energy sector. Its operations span gathering, processing, storage, and terminaling, primarily supporting crude oil and natural gas activities. With a significant pipeline network and strategic facilities, HESM serves as a key infrastructure player in North Dakota and Minnesota.

What Is the Investment Thesis for HESM?

With a market capitalization of $8.31B and a P/E ratio of 13.86, HESM demonstrates financial stability. A high dividend yield of 7.95% offers an attractive income stream for investors. The company's diversified operations across gathering, processing, storage, and terminaling provide resilience against commodity price volatility. Growth catalysts include expansion of existing infrastructure and potential acquisitions of complementary assets. However, investors may want to evaluate risks related to regulatory changes and fluctuations in production volumes from the Bakken region. The company's beta of 0.55 suggests lower volatility compared to the broader market.

Based on FMP financials and quantitative analysis

HESM Key Highlights

Market Cap of $8.31B indicates substantial size and investor confidence.

• P/E ratio of 13.86 suggests a reasonable valuation compared to earnings.
• Profit Margin of 22.6% demonstrates efficient operations and profitability.
• Gross Margin of 69.4% reflects strong pricing power and cost management.
• Dividend Yield of 7.95% provides a significant income stream for investors.

Who Are HESM's Competitors?

HESM is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are HESM's Key Strengths?

Strategic asset locations in key shale plays.

• Integrated suite of midstream services.
• Long-term contracts with producers.
• Experienced management team.

What Are HESM's Weaknesses?

Concentration of assets in the Bakken region.

• Exposure to commodity price volatility.
• Dependence on production volumes from key customers.
• Limited geographic diversification.

What Could Drive HESM Stock Higher?

Potential acquisitions of complementary midstream assets to expand geographic footprint.

• Expansion of gathering infrastructure to support increased production volumes in the Bakken region.
• Optimization of processing and storage facilities to improve efficiency and increase throughput.
• Development of export capabilities to capitalize on growing demand for U.S. crude oil and natural gas in international markets.

What Are the Key Risks for HESM?

Regulatory changes impacting midstream operations.

• Decline in production volumes from the Bakken region.
• Increased competition from other midstream service providers.
• Environmental concerns and opposition to fossil fuel development.
• Fluctuations in commodity prices affecting profitability.

What Are the Growth Opportunities for HESM?

• Expansion of Gathering Infrastructure: Hess Midstream LP can expand its gathering infrastructure to support increased production volumes in the Bakken and Three Forks shale plays. The market for gathering services is expected to grow as producers seek to optimize their operations and reduce transportation costs. Investing in additional pipelines and compression facilities can enhance HESM's competitive position and drive revenue growth. This expansion could target a 5-10% increase in gathering capacity over the next three years.
• Strategic Acquisitions: Hess Midstream LP can pursue strategic acquisitions of complementary midstream assets to expand its geographic footprint and service offerings. Acquiring assets in adjacent areas or related segments, such as natural gas processing plants or storage facilities, can create synergies and increase the company's scale. This strategy could involve acquiring smaller midstream operators or assets divested by larger companies, potentially adding 15-20% to the asset base within five years.
• Optimization of Processing and Storage Facilities: Hess Midstream LP can optimize its processing and storage facilities to improve efficiency and increase throughput. Upgrading existing equipment and implementing advanced technologies can reduce operating costs and enhance the value of its services. This includes optimizing the Tioga Gas Plant and the Mentor Storage Terminal to handle increased volumes and meet evolving customer needs. Efficiency improvements could boost processing capacity by 10-15% over the next two years.
• Development of Export Capabilities: Hess Midstream LP can further develop its export capabilities to capitalize on growing demand for U.S. crude oil and natural gas in international markets. Expanding its terminaling and export facilities can provide access to global markets and diversify its customer base. This includes increasing the capacity of the Ramberg terminal facility and the Tioga rail terminal to handle larger volumes of exports. Export volumes could potentially increase by 20-25% over the next four years.
• Focus on Sustainable Practices: Hess Midstream LP can invest in sustainable practices to reduce its environmental footprint and enhance its reputation. This includes implementing technologies to reduce methane emissions, improve water management, and enhance energy efficiency. Focusing on sustainable practices can attract environmentally conscious investors and customers, while also reducing regulatory risks. Investments in these areas could lead to a 5-10% reduction in emissions intensity over the next three years.

What Are HESM's Competitive Advantages?

• Strategic Asset Locations: Its assets are strategically located in the Bakken and Three Forks shale plays, providing a competitive advantage in serving producers in these regions.
• Integrated Service Offerings: The company offers a full suite of midstream services, including gathering, processing, storage, and terminaling, which provides a comprehensive solution for its customers.
• Long-Term Contracts: Hess Midstream LP has long-term contracts with its customers, providing stable and predictable revenue streams.
• Operational Expertise: The company has extensive operational expertise in managing and maintaining midstream infrastructure, ensuring reliable service delivery.

What Does HESM Do?

Hess Midstream LP, established in 2014 and headquartered in Houston, Texas, is a midstream service provider focused on owning, developing, operating, and acquiring midstream assets. The company operates through three primary segments: Gathering; Processing and Storage; and Terminaling and Export. The Gathering segment includes natural gas gathering and compression, crude oil gathering systems, and produced water gathering and disposal facilities. This segment features approximately 1,350 miles of high and low-pressure natural gas and natural gas liquids gathering pipelines with a capacity of approximately 450 million cubic feet per day, along with approximately 550 miles of crude oil gathering pipelines. The Processing and Storage segment encompasses the Tioga Gas Plant in Tioga, North Dakota, a 50% interest in the Little Missouri 4 gas processing plant in McKenzie County, North Dakota, and the Mentor Storage Terminal in Mentor, Minnesota, which is a propane storage cavern with rail and truck loading/unloading capabilities. The Terminaling and Export segment owns the Ramberg terminal facility, the Tioga rail terminal, crude oil rail cars, and the Johnson's Corner Header System, a crude oil pipeline header system. Hess Midstream LP plays a crucial role in supporting the production and transportation of crude oil, natural gas, and natural gas liquids in the Bakken and Three Forks shale plays.

What Products and Services Does HESM Offer?

• Owns and operates natural gas gathering and compression systems.
• Provides crude oil gathering systems.
• Manages produced water gathering and disposal facilities.
• Operates natural gas processing and fractionation plants.
• Provides propane storage and rail/truck loading facilities.
• Owns and operates terminal facilities for crude oil and natural gas liquids.
• Manages crude oil rail cars.
• Operates crude oil pipeline header systems.

How Does HESM Make Money?

• Generates revenue through fees for gathering, processing, storing, and terminaling crude oil, natural gas, and natural gas liquids.
• Contracts with producers to provide midstream services based on volume throughput.
• Operates and maintains midstream infrastructure to ensure reliable service delivery.
• Invests in new and existing assets to expand capacity and improve efficiency.

What Industry Does HESM Operate In?

Hess Midstream LP operates within the oil and gas midstream sector, which is characterized by the transportation, processing, and storage of hydrocarbons. The industry is influenced by factors such as crude oil and natural gas production levels, infrastructure development, and regulatory policies. The competitive landscape includes companies like Antero Midstream Corporation (AM) and Sunoco LP (SUN), which offer similar midstream services. The demand for midstream services is driven by the need to transport and process increasing production volumes from shale plays like the Bakken, where Hess Midstream LP has a significant presence.

Who Are HESM's Key Customers?

• Crude oil and natural gas producers in the Bakken and Three Forks shale plays.
• Refineries and petrochemical plants that require processed hydrocarbons.
• Energy companies that need storage and terminaling services.
• Companies involved in the export of crude oil and natural gas liquids.

Hess Midstream LP (HESM) Valuation Context

Valued at $8.31B, HESM is classified as a mid-cap stock. Analyst price targets span from $32.00 to $39.00, with a consensus of $35.50. At the current price of $40.20, that implies roughly 12% downside from the consensus target. Relative to its peer group, HESM's quantitative score of 76/100 is roughly in line with the peer average of 74/100.

HESM Revenue & Earnings Trend

In Q2 FY2026, HESM generated $399.0M in top-line revenue, marking a sequential increase of 2.6%. The company recorded net income of $96.4M, with diluted EPS of $0.75. Quarter-over-quarter revenue has been mixed, typical for a mid-cap company operating in Energy. Across the four most recent quarters, HESM averaged $0.72 in diluted EPS.

Company Profile

Hess Midstream LP operates in the Oil & Gas Midstream industry within the Energy sector. It is headquartered in Houston, US. The company is led by CEO Jonathan C. Stein. HESM has traded publicly since 2017.

Return on equity for Hess Midstream LP stands at 69.0%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 8.8%, showing how much profit it generates from its asset base. HESM trades at a trailing price-to-earnings ratio of 13.86, below the Energy sector average of ~15.80x. Its free cash flow yield is 8.6%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.77 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 7.5%, the inverse of the P/E and a quick read on earnings relative to price.

Hess Midstream LP's Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 2.44 places it in the grey zone, a middle ground that warrants monitoring.

Hess Midstream LP has beaten Wall Street's EPS estimate in 6 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 7.0% above estimates on average.

The most recent 12 insider filings for Hess Midstream LP break down as 5 sales and 7 purchases. On net that is roughly 4K shares acquired (about $50K) — insiders putting money in tends to read as conviction.

HESM Financials

HESM Latest News

HESM Analyst Consensus

HESM MoonshotScore

Hess Midstream LP Energy Stock: Key Questions Answered

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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