HESM

Hess Midstream LP is transitioning from heavy infrastructure investment to maximizing cash generation and increasing shareholder returns, forming the basis for my Buy rating. HESM's fee-based business model, supported by long-term agreements and minimum volume commitments, underpins dependable cash flows and sustainable distribution growth. Management targets at least 5% annual distribution growth through 2028, alongside disciplined unit repurchases, prudent debt management, and selective acquisitions.

Hess Midstream remains a "Strong Buy," offering an 8.5% yield and at least 15% upside, despite recent underperformance and Bakken drilling headwinds. HESM's long-term contract with Chevron through 2033, with annual CPI-linked fee escalators, secures stable cash flow and mitigates near-term oil price and volume risks. Free cash flow yield stands at ~13%, supported by reduced capex, growing third-party revenues, and robust EBITDA margins of 83%.

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Key Takeaways: On a year-over-year basis, 96.0% of the Alerian Midstream Energy Index (AMNA) by weighting have grown their dividends. MLPs largely drove sequential growth in payouts for 1Q26, while most corporations kept their dividends steady.

While the top- and bottom-line numbers for Hess Midstream Partners (HESM) give a sense of how the business performed in the quarter ended March 2026, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.

Hess Midstream LP (HESM) Q1 2026 Earnings Call Transcript

HOUSTON--(BUSINESS WIRE)---- $HESM--Hess Midstream LP (NYSE: HESM) (“Hess Midstream” or the “Company”) today reported first quarter 2026 net income of $157.7 million compared with net income of $161.4 million for the first quarter of 2025. After deduction for noncontrolling interests, net income attributable to Hess Midstream was $87.6 million, or $0.68 basic earnings per Class A share, compared with $0.65 basic earnings per Class A share in the first quarter of 2025. Hess Midstream generated Adjusted EB.

The midstream energy sector has reinforced its reputation as a reliable source of income for investors. Key industry players have announced sequential increases to their latest payouts.

HOUSTON--(BUSINESS WIRE)---- $HESM--HESS MIDSTREAM LP ANNOUNCES DISTRIBUTION PER SHARE LEVEL INCREASE.

HOUSTON--(BUSINESS WIRE)--Hess Midstream LP Schedules Earnings Release Conference Call.