Hess Midstream aims for 5% yearly distribution increase by 2027 while adjusting capital plan to reduce expenditures.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 03 2025
0mins
Should l Buy HESM?
Source: SeekingAlpha
Operational Performance: Hess Midstream reported strong operational results in Q3 2025, with increased gas throughputs despite challenges from localized flooding. The company executed a $100 million share repurchase and raised distributions by 2.4%, aiming for a 10% annualized increase for Class A shares.
Financial Guidance: The company narrowed its full-year guidance for net income and adjusted EBITDA, expecting net income between $685 million to $695 million and adjusted EBITDA between $1.245 billion to $1.255 billion. Capital expenditures were reduced to approximately $270 million following the suspension of the Capa gas plant project.
Future Outlook: Management anticipates flat fourth-quarter volumes due to lower expected third-party volumes and scheduled maintenance. Guidance for 2026 and 2028 minimum volume commitments will be released after the budget process concludes in December.
Analyst Sentiment: Analysts maintained a neutral tone, focusing on capital allocation and operational trends, while management emphasized financial discipline and the importance of collaboration with Chevron as a sponsor. The sentiment remained steady, with a focus on free cash flow growth and shareholder returns.
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Analyst Views on HESM
Wall Street analysts forecast HESM stock price to fall
3 Analyst Rating
0 Buy
3 Hold
0 Sell
Hold
Current: 38.920
Low
34.00
Averages
36.50
High
39.00
Current: 38.920
Low
34.00
Averages
36.50
High
39.00
About HESM
Hess Midstream LP is a midstream company that owns, operates, develops and acquires a diverse set of midstream assets to provide services to the Company and third-party customers. It owns oil, gas and produces water handling assets that are located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota. Its gathering segment includes Hess North Dakota Pipeline Operations LP and Hess Water Services Holdings LLC, which owns natural gas gathering and compression, crude oil gathering, and produced water gathering and disposal. Its processing and storage segment includes Hess TGP Operations LP and Hess Mentor Storage Holdings LLC, which owns Tioga gas plant, an equity investment in LM4 Joint Venture, and mentor storage terminal. Its terminaling and export segment includes Hess North Dakota Export Logistics Operations LP, which owns Ramberg Terminal Facility, Tioga Rail Terminal, Crude Oil Rail Cars, Johnson's Corner Header System, and other DAPL connections.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Hess Midstream Files Annual Report for 2025
- Annual Report Filing: Hess Midstream filed its annual report on Form 10-K for the fiscal year ending December 31, 2025, with the SEC on February 25, 2026, enhancing financial transparency and boosting investor confidence.
- Financial Information Access: Shareholders can access the annual report electronically on the company's website or request printed copies for free via email, demonstrating the company's commitment to shareholder service and aiming to improve shareholder satisfaction.
- Business Overview: Hess Midstream is a fee-based, growth-oriented midstream company focused on owning, operating, and developing a diverse set of midstream assets, primarily serving Chevron and its subsidiaries, highlighting its significant position in the industry.
- Asset Distribution: The company's assets are primarily located in the Bakken and Three Forks shale plays in North Dakota, encompassing oil, gas, and produced water handling, indicating a strategic presence in key energy regions.
See More
Hess Midstream Files Annual Report for 2025
- Annual Report Filing: Hess Midstream filed its annual report on Form 10-K for the fiscal year ended December 31, 2025, with the SEC on February 25, 2026, enhancing financial transparency and bolstering investor confidence.
- Financial Information Access: Shareholders can access the annual report electronically on the company's website or request printed copies free of charge via email, ensuring all investors can conveniently obtain the complete audited financial statements.
- Business Overview: Hess Midstream is a fee-based, growth-oriented midstream company that focuses on owning, operating, and developing a diverse set of midstream assets, providing services to Chevron and its subsidiaries, highlighting its significant role in the industry.
- Asset Distribution: The company primarily owns oil, gas, and produced water handling assets located in the Bakken and Three Forks Shale plays in North Dakota, indicating its strategic positioning in key energy regions.
See More
Cushing Asset Management Reduces Stake in Hess Midstream
- Share Reduction Details: According to a SEC filing dated January 27, 2026, Cushing Asset Management sold 960,000 shares of Hess Midstream in Q4 2025, with an estimated transaction value of $32.28 million, indicating the fund's strategic response to market fluctuations.
- Stake Decrease: Following this sale, Cushing's stake in Hess Midstream has decreased to approximately 2.69%, reflecting a diminished confidence in the asset and potentially impacting the overall stability of its investment portfolio.
- Market Performance Analysis: As of January 26, 2026, Hess Midstream shares were priced at $35.13, reflecting a year-over-year decline of approximately 5.7% and underperforming the S&P 500 by 22.1 percentage points, indicating relative weakness in the market.
- Investor Focus Points: Hess Midstream is recognized for its stable cash flow and a dividend yield of 7.94%, prompting investors to monitor its cash flow coverage and debt management to assess its attractiveness as an income-focused infrastructure investment.
See More
S&P 500 Near All-Time High, Yet Bargain Investments Exist
- High-Yield Stock Picks: Hess Midstream Partners (HESM) and Simon Property Group (SPG) are highlighted as attractive high-yield stocks, with dividend yields of 0.43% and 1.62% respectively, indicating stable cash flows and investment appeal.
- Market Opportunity Analysis: Despite the S&P 500 nearing its all-time high, investors can still find value in high-yield stocks, particularly during market volatility, as these stocks offer a relatively safe investment option that can mitigate downside risks.
- Investor Focus: The video emphasizes the potential attractiveness of these two stocks, especially in the current economic climate where investors seek stable income sources to navigate uncertainties, with Hess and Simon's dividend policies providing a solid solution.
- Future Outlook: As market fluctuations continue, the high dividend yields of Hess and Simon may attract more income-seeking investors, potentially driving their stock prices higher and further enhancing their strategic positions within investment portfolios.
See More
Hess Midstream Q4 2025 Earnings Call Insights
- Significant Capital Reduction: Hess Midstream anticipates a 40% decrease in capital spending for 2026 to approximately $150 million, with further reductions expected to below $75 million annually in 2027 and 2028, which will enhance financial flexibility and support future shareholder returns.
- Stable Revenue Outlook: The company projects net income for 2026 to be between $650 million and $700 million, with adjusted EBITDA expected between $1.225 billion and $1.275 billion, indicating stable revenue underpinned by minimum volume commitments, thereby boosting investor confidence.
- Free Cash Flow Growth: Adjusted free cash flow is expected to reach between $850 million and $900 million in 2026, reflecting a 12% growth over 2025, with plans to allocate part of this cash flow towards debt repayment and shareholder returns, further solidifying the company's financial health.
- Weather Impact and Risk Management: Despite revenue declines in the fourth quarter due to severe winter weather, management emphasized that 95% of revenues are protected by minimum volume commitments, demonstrating the company's resilience in managing short-term risks while ensuring long-term growth sustainability.
See More
Hess Midstream Reports Q4 2025 Financial Highlights
- Net Income Performance: Hess Midstream reported net income of $168 million for Q4 2025, a slight decrease from $172.1 million in Q4 2024, indicating challenges in profitability due to severe winter weather impacts.
- Cash Flow and EBITDA: The company generated $245.6 million in net cash from operating activities and reported Adjusted EBITDA of $309.1 million, demonstrating effective cost control and cash flow maintenance despite revenue fluctuations.
- Capital Expenditure Reduction: Capital expenditures for Q4 2025 totaled $47.6 million, a 44% decrease from $84.3 million in the prior year, reflecting a strategic focus on reducing capital spending following the completion of infrastructure projects to enhance free cash flow.
- Quarterly Cash Distribution Increase: The Board declared a quarterly cash distribution of $0.7641 per share for Q4 2025, an increase of $0.0093 from Q3, underscoring the company's ongoing commitment to shareholder returns despite overall revenue volatility.
See More
Hess Midstream Files Annual Report for 2025
- Annual Report Filing: Hess Midstream filed its annual report on Form 10-K for the fiscal year ending December 31, 2025, with the SEC on February 25, 2026, enhancing financial transparency and boosting investor confidence.
- Financial Information Access: Shareholders can access the annual report electronically on the company's website or request printed copies for free via email, demonstrating the company's commitment to shareholder service and aiming to improve shareholder satisfaction.
- Business Overview: Hess Midstream is a fee-based, growth-oriented midstream company focused on owning, operating, and developing a diverse set of midstream assets, primarily serving Chevron and its subsidiaries, highlighting its significant position in the industry.
- Asset Distribution: The company's assets are primarily located in the Bakken and Three Forks shale plays in North Dakota, encompassing oil, gas, and produced water handling, indicating a strategic presence in key energy regions.
See More
Hess Midstream Files Annual Report for 2025
- Annual Report Filing: Hess Midstream filed its annual report on Form 10-K for the fiscal year ended December 31, 2025, with the SEC on February 25, 2026, enhancing financial transparency and bolstering investor confidence.
- Financial Information Access: Shareholders can access the annual report electronically on the company's website or request printed copies free of charge via email, ensuring all investors can conveniently obtain the complete audited financial statements.
- Business Overview: Hess Midstream is a fee-based, growth-oriented midstream company that focuses on owning, operating, and developing a diverse set of midstream assets, providing services to Chevron and its subsidiaries, highlighting its significant role in the industry.
- Asset Distribution: The company primarily owns oil, gas, and produced water handling assets located in the Bakken and Three Forks Shale plays in North Dakota, indicating its strategic positioning in key energy regions.
See More
Cushing Asset Management Reduces Stake in Hess Midstream
- Share Reduction Details: According to a SEC filing dated January 27, 2026, Cushing Asset Management sold 960,000 shares of Hess Midstream in Q4 2025, with an estimated transaction value of $32.28 million, indicating the fund's strategic response to market fluctuations.
- Stake Decrease: Following this sale, Cushing's stake in Hess Midstream has decreased to approximately 2.69%, reflecting a diminished confidence in the asset and potentially impacting the overall stability of its investment portfolio.
- Market Performance Analysis: As of January 26, 2026, Hess Midstream shares were priced at $35.13, reflecting a year-over-year decline of approximately 5.7% and underperforming the S&P 500 by 22.1 percentage points, indicating relative weakness in the market.
- Investor Focus Points: Hess Midstream is recognized for its stable cash flow and a dividend yield of 7.94%, prompting investors to monitor its cash flow coverage and debt management to assess its attractiveness as an income-focused infrastructure investment.
See More
S&P 500 Near All-Time High, Yet Bargain Investments Exist
- High-Yield Stock Picks: Hess Midstream Partners (HESM) and Simon Property Group (SPG) are highlighted as attractive high-yield stocks, with dividend yields of 0.43% and 1.62% respectively, indicating stable cash flows and investment appeal.
- Market Opportunity Analysis: Despite the S&P 500 nearing its all-time high, investors can still find value in high-yield stocks, particularly during market volatility, as these stocks offer a relatively safe investment option that can mitigate downside risks.
- Investor Focus: The video emphasizes the potential attractiveness of these two stocks, especially in the current economic climate where investors seek stable income sources to navigate uncertainties, with Hess and Simon's dividend policies providing a solid solution.
- Future Outlook: As market fluctuations continue, the high dividend yields of Hess and Simon may attract more income-seeking investors, potentially driving their stock prices higher and further enhancing their strategic positions within investment portfolios.
See More
Hess Midstream Q4 2025 Earnings Call Insights
- Significant Capital Reduction: Hess Midstream anticipates a 40% decrease in capital spending for 2026 to approximately $150 million, with further reductions expected to below $75 million annually in 2027 and 2028, which will enhance financial flexibility and support future shareholder returns.
- Stable Revenue Outlook: The company projects net income for 2026 to be between $650 million and $700 million, with adjusted EBITDA expected between $1.225 billion and $1.275 billion, indicating stable revenue underpinned by minimum volume commitments, thereby boosting investor confidence.
- Free Cash Flow Growth: Adjusted free cash flow is expected to reach between $850 million and $900 million in 2026, reflecting a 12% growth over 2025, with plans to allocate part of this cash flow towards debt repayment and shareholder returns, further solidifying the company's financial health.
- Weather Impact and Risk Management: Despite revenue declines in the fourth quarter due to severe winter weather, management emphasized that 95% of revenues are protected by minimum volume commitments, demonstrating the company's resilience in managing short-term risks while ensuring long-term growth sustainability.
See More
Hess Midstream Reports Q4 2025 Financial Highlights
- Net Income Performance: Hess Midstream reported net income of $168 million for Q4 2025, a slight decrease from $172.1 million in Q4 2024, indicating challenges in profitability due to severe winter weather impacts.
- Cash Flow and EBITDA: The company generated $245.6 million in net cash from operating activities and reported Adjusted EBITDA of $309.1 million, demonstrating effective cost control and cash flow maintenance despite revenue fluctuations.
- Capital Expenditure Reduction: Capital expenditures for Q4 2025 totaled $47.6 million, a 44% decrease from $84.3 million in the prior year, reflecting a strategic focus on reducing capital spending following the completion of infrastructure projects to enhance free cash flow.
- Quarterly Cash Distribution Increase: The Board declared a quarterly cash distribution of $0.7641 per share for Q4 2025, an increase of $0.0093 from Q3, underscoring the company's ongoing commitment to shareholder returns despite overall revenue volatility.
See More
