Stock of the Day

September 13, 2023

Hess (HES)

$160.31
+$11.34 (+7.6%)
Market Cap: $49.59B

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 $142, which reflects a stable market position and potential for growth.
  • Hess Co. has a solid dividend yield of 1.40%, providing a consistent income stream for investors.
  • The company reported a return on equity of 21.78%, indicating effective management and profitability relative to shareholder equity.
  • Recent analyst upgrades, including a "buy" rating from UBS Group, suggest positive market sentiment and potential for stock appreciation.
  • Hess Co. operates in both Exploration and Production and Midstream segments, diversifying its revenue streams and reducing risk.

Hess Bear Case

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

  • The company experienced a year-over-year revenue decline of 12.1%, which may indicate challenges in maintaining sales growth.
  • Hess Co. missed earnings expectations in the latest quarter, which could raise concerns about its financial performance.
  • Insider selling, including a significant sale by the CEO, may signal a lack of confidence in the company's short-term prospects.
  • The stock has a beta of 0.62, suggesting lower volatility compared to the market, which may limit potential high returns.
  • Analysts have mixed ratings, with an equal number of hold and buy ratings, indicating uncertainty about the stock's future performance.
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