HESM - Hess Midstream: Q1 Results Suggest Growth Trajectory Is On Track

2024-04-27 09:00:00 ET

Summary

• Shares of Hess Midstream have risen over 23% in the past year, with a 7+% dividend yield.
• Q1 results were mixed due to taxes and interest expense, but ongoing trends are strong and guidance was affirmed.
• The company's highly predictable and stable cash flows make it an attractive investment.
• There is also the potential for Chevron to acquire HESM after it completes its acquisition of HES; though HESM shares are attractive even on a stand-alone basis.

Shares of Hess Midstream ( HESM ) have been a solid performer over the past year, rising over 23% in addition to its 7+% dividend yield. While Q1 results appeared mixed at first, ongoing trends are strong, and guidance was affirmed. In February , I reiterated HESM as a “strong buy.” Since then, shares have returned 2.5%, roughly in-line with the S&P 500’s gain. These results do not shift my bullish view, given the company’s growth and highly-certain cash flows. I would continue to be a buyer....

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