Stock of the Day

September 13, 2023

Hess (HES)

$136.01
+$2.96 (+2.2%)
Market Cap: $42.08B

About Hess

Hess Corporation, an exploration and production company, explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. The company operates in two segments, Exploration and Production, and Midstream. It conducts production operations primarily in the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities principally offshore Guyana, the U.S. Gulf of Mexico, and offshore Suriname and Canada. The company is also involved in gathering, compressing, and processing natural gas; fractionating NGLs; gathering, terminaling, loading, and transporting crude oil and NGL through rail car; and storing and terminaling propane, as well as providing water handling services primarily in the Bakken Shale plays in the Williston Basin area of North Dakota. The company was incorporated in 1920 and is headquartered in New York, New York.

Hess Bull Case

Here are some ways that investors could benefit from investing in Hess Co.:

  • The current stock price is around $159, which may present a buying opportunity for investors looking for value in the energy sector.
  • Hess Co. has a solid return on equity of over 26%, indicating effective management and profitability relative to shareholder equity.
  • The company recently announced a quarterly dividend of $0.50, translating to an annualized dividend yield of 1.50%, which can provide a steady income stream for investors.
  • Despite a recent decline in revenue, Hess Co. maintains a strong net margin of over 21%, suggesting efficient operations and the ability to generate profit from sales.
  • Analysts have a consensus rating of "Moderate Buy" for Hess Co., with several recent upgrades indicating positive sentiment and potential for stock appreciation.

Hess Bear Case

Investors should be bearish about investing in Hess Co. for these reasons:

  • The company reported a revenue decline of 12.1% year-over-year, which may raise concerns about its growth prospects in a competitive market.
  • Hess Co. missed earnings expectations in its latest quarter, which could indicate challenges in meeting market forecasts and investor confidence.
  • Insider selling has occurred, with the CEO selling a significant number of shares, which might signal a lack of confidence in the company's short-term performance.
  • The stock has a beta of 0.61, suggesting lower volatility compared to the market, but this could also mean limited upside potential during market rallies.
  • Analysts have adjusted target prices downward, indicating a cautious outlook on the stock's future performance.
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