Core Viewpoint - Investors in Hess Midstream LP (HESM) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Feb. 2, 2026 $43 Put option [1] Group 1: Implied Volatility - Implied volatility indicates the market's expectations for future price movements, with high levels suggesting anticipation of significant price changes or upcoming events that could lead to a rally or sell-off [2] - Options traders often seek high implied volatility options to sell premium, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected [4] Group 2: Analyst Sentiment - Hess Midstream currently holds a Zacks Rank 3 (Hold) in the Energy and Pipeline - Master Limited Partnerships industry, which is in the top 39% of the Zacks Industry Rank [3] - Over the past 60 days, two analysts have raised their earnings estimates for the current quarter, while none have lowered them, resulting in a slight decrease in the Zacks Consensus Estimate from 68 cents to 65 cents per share [3]

Hess Midstream LP (NYSE:HESM) reported an EPS of $0.72, slightly below the estimated $0.723, indicating growth in profitability over the year.The company's revenue was approximately $404.2 million, missing the estimated $419.2 million, which might concern investors about its market expectations fulfillment.HESM's financial health shows a high debt-to-equity ratio of 6.63, suggesting significant reliance on debt financing and potential liquidity issues with a current ratio of 0.75.Hess Midstream LP (NYSE:HES ...

Financial Performance - Hess Midstream LP reported fourth-quarter 2025 earnings per share of $0.72, meeting analyst expectations, while revenue was $404.2 million, falling short of the forecast of $417.05 million [1] - The net income for the quarter totaled $168.0 million, with $93.3 million attributable to Hess Midstream LP [2] - Adjusted EBITDA reached $309.1 million, and adjusted free cash flow totaled $207.8 million, indicating resilient financial performance despite lower throughput volumes [2] Operational Metrics - Throughput volumes declined year over year across all segments: oil terminaling volumes decreased by 4%, gas processing by 1%, and water gathering by 5% [3] - The declines in throughput were primarily attributed to reduced production caused by severe winter weather [3] - Capital expenditures for the quarter totaled $47.6 million, down 44% from the prior-year period, reflecting the completion of gas compression expansion projects [3]

Costs and expenses (excluding depreciation and amortization, pass-through costs, and net of the company’s proportional share of LM4 earnings) decreased by about $7 million, driven by lower allocations under omnibus and employee secondment agreements and lower seasonal maintenance activity, partially offset by higher processing fees. Chadwick said the company’s gross adjusted EBITDA margin in the fourth quarter held at approximately 83%, above its 75% target, reflecting “continued strong operating leverage.” ...

Financial Data and Key Metrics Changes - For the full year 2025, the company reported net income of approximately $685 million and Adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In the fourth quarter, net income was $168 million compared to approximately $176 million in the third quarter, and Adjusted EBITDA was $309 million compared with approximately $321 million in the third quarter [10][11] - The gross Adjusted EBITDA margin for the fourth quarter was maintained at approximately 83%, above the target of 75% [11] Business Line Data and Key Metrics Changes - Fourth quarter gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] - For the full year 2025, gas processing volumes averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] Market Data and Key Metrics Changes - The company expects lower volumes across its systems in the first quarter of 2026 due to severe winter weather, with a recovery anticipated as weather improves [7][41] - Approximately 95% of revenues are protected by minimum volume commitments (MVCs) for the full year 2026, providing a safety net against volume fluctuations [8][14] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][15] - The strategy includes a targeted 5% distribution growth per Class A share through 2028, supported by significant free cash flow generation [5][29] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the severe winter weather has impacted operations but expects a recovery in production as conditions improve [41] - The company reiterated its guidance for net income and Adjusted EBITDA growth through 2028, driven by gas volume growth and lower capital expenditures [8][29] Other Important Information - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] - Adjusted free cash flow for the first quarter of 2026 is expected to increase relative to the fourth quarter of 2025 due to lower capital expenditures [12] Q&A Session Summary Question: Balance sheet and debt repayment strategy - Management indicated that a portion of free cash flow will be used for debt repayment, with a conservative financial strategy in line with volume profiles [17][19] Question: Third-party outlook and Chevron's production target - Management expects no change in third-party volumes, maintaining an average of 10% across oil and gas, and confirmed Chevron's target of 200,000 barrels of oil equivalent per day remains intact [21][23] Question: Growth drivers and cost-cutting impact - Future growth is driven by inflation escalators and reduced capital expenditures, with significant free cash flow generation expected [26][28] Question: Weather impact on production - Management noted that while severe weather has affected operations, a recovery is anticipated as conditions improve, with MVCs providing revenue protection [40][41] Question: Long-term leverage target - Management stated there is no specific leverage target, but expects natural deleveraging as EBITDA grows and debt levels remain stable [43][45]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported a net income of approximately $685 million and adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In the fourth quarter, net income was $168 million compared to approximately $176 million in the third quarter, and adjusted EBITDA was $309 million compared with approximately $321 million in the third quarter, primarily due to lower revenues from severe winter weather [10][11] - The gross adjusted EBITDA margin for the fourth quarter was maintained at approximately 83%, above the target of 75% [11] Business Line Data and Key Metrics Changes - Fourth quarter gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] - For the full year 2025, gas processing volumes averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] Market Data and Key Metrics Changes - The company expects lower volumes across its systems for the first quarter of 2026 due to severe winter weather, but anticipates growth in volumes throughout the rest of the year consistent with historical seasonal expectations [7][8] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][9] - The strategy includes leveraging historical investments to drive significant free cash flow generation, supporting a targeted 5% distribution growth per Class A share through 2028, along with potential share repurchases and debt repayment [5][9] Management's Comments on Operating Environment and Future Outlook - Management reiterated that approximately 95% of revenues are protected by minimum volume commitments (MVCs) for 2026, which provides a safety net against production fluctuations [8][14] - The company expects annualized net income and adjusted EBITDA growth of 5% and approximately 10% annualized adjusted free cash flow growth through 2028, supported by gas volume growth and lower operating and capital expenditures [8][15] Other Important Information - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] - Adjusted free cash flow for the first quarter of 2026 is expected to increase relative to the fourth quarter of 2025, as capital expenditures are projected to be lower [12] Q&A Session Summary Question: Balance sheet and debt repayment priorities - Management plans to use a portion of free cash flow after distributions to pay down debt, expecting to naturally deliver below 3x leverage in the next few years as EBITDA grows without increasing absolute debt levels [18][19] Question: Third-party outlook and Chevron's production target - Management expects no change to the third-party outlook, maintaining an average of 10% across oil and gas, and confirmed Chevron's target of 200,000 barrels of oil equivalent per day remains intact [21][23] Question: Growth drivers and cost-cutting contributions - Future EBITDA growth is driven by inflation escalators and gas growth, with free cash flow growth resulting from reduced capital expenditures as the infrastructure buildout is completed [27][29] Question: CapEx flexibility - The company expects capital expenditures to be lower than the previous year, with guidance of $150 million for 2026 and potentially less than $75 million in 2027 and 2028 [31][35] Question: Weather impact on production - Management noted that while severe cold weather has impacted production, they expect a recovery as weather improves, with a typical seasonal increase in volumes anticipated in the second and third quarters [40][41]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported a net income of approximately $685 million and adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In Q4 2025, net income was $168 million, down from approximately $176 million in Q3 2025, while adjusted EBITDA was $309 million compared to approximately $321 million in Q3 2025 [10][11] - The company expects adjusted free cash flow in Q1 2026 to increase relative to Q4 2025, with projected capital expenditures lower than in the previous quarter [12] Business Line Data and Key Metrics Changes - Gas processing volumes for 2025 averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] - In Q4 2025, gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] Market Data and Key Metrics Changes - The company anticipates lower volumes across its systems in Q1 2026 due to severe winter weather, but expects growth in volumes throughout the rest of 2026 consistent with historical seasonal expectations [6][12] - Approximately 95% of the company's revenues are protected by minimum volume commitments (MVCs) for the full year 2026, providing a stable revenue base [7][13] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][14] - The strategy includes a targeted 5% distribution growth per Class A share through 2028, supported by significant free cash flow generation and debt repayment [5][9] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the severe winter weather impacted Q4 2025 performance but expects a recovery in production as weather conditions improve [40] - The company reiterated its long-term growth outlook, expecting approximately 10% annualized adjusted free cash flow growth through 2028, driven by gas volume growth and lower operating and capital expenditures [8][29] Other Important Information - The gross adjusted EBITDA margin for Q4 2025 was maintained at approximately 83%, above the target of 75%, indicating strong operating leverage [11] - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] Q&A Session Summary Question: Balance Sheet and Debt Repayment Strategy - Management confirmed plans to use a portion of free cash flow after distributions for debt repayment, expecting to naturally deliver below 3x leverage in the coming years as EBITDA grows [18][19] Question: Third-Party Outlook and Chevron's Production Target - Management indicated no change to the third-party outlook, expecting an average of 10% across oil and gas, and reaffirmed Chevron's target of 200,000 barrels of oil equivalent per day [21][23] Question: Growth Drivers and Cost-Cutting Impact - Management stated that growth in EBITDA is driven by inflation escalators and gas volume growth, with free cash flow growth supported by reduced capital expenditures [27][29] Question: Capital Expenditures Flexibility - Management expects capital expenditures to be lower than $150 million in 2026, with potential for further reductions in 2027 and 2028 [32][35] Question: Weather Impact on Production - Management noted that while severe weather has impacted production, they expect a recovery as conditions improve, with 95% of revenues protected by MVCs [40][41] Question: Long-Term Leverage Target - Management indicated there is no specific leverage target, but expects natural deleveraging as EBITDA grows and debt levels remain stable [43][44]

On a full-year basis, we are reiterating the volume guidance that we gave in December for the full year of 2026 and expect growth in volumes across our systems through the rest of the year consistent with historical seasonal volume expectations. With revenues that are approximately 95% protected by MVCs on a full-year basis, we anticipate net income and adjusted EBITDA to be higher through the rest of 2026 relative to our first quarter guidance.Crude terminaling volumes averaged 122,000 barrels of oil per d ...

Financial Performance - Fourth quarter 2025 net income was $168.0 million, a decrease from $172.1 million in the fourth quarter of 2024, with net income attributable to Hess Midstream at $93.3 million or $0.72 per Class A share, compared to $0.68 per Class A share in the prior year [2][8]. - Adjusted EBITDA for the fourth quarter of 2025 was $309.1 million, up from $298.2 million in the fourth quarter of 2024, while Adjusted Free Cash Flow was $207.8 million, an increase from $164.3 million in the prior year [5][9]. - Full year 2025 net income was $684.6 million, with Adjusted EBITDA of $1,238.1 million, and total debt at approximately $3.8 billion, representing a leverage ratio of about 3.1x Adjusted EBITDA [9][23]. - Total revenues for the year ended December 31, 2025, were $1,621.3 million, an increase of 8.4% from $1,495.5 million in 2024 [34]. - Adjusted EBITDA for 2025 was $1,238.1 million, compared to $1,136.1 million in 2024, reflecting an increase of 9% [34]. - Net income attributable to Hess Midstream LP for 2025 was $352.9 million, a significant increase from $223.1 million in 2024, representing a growth of 58% [34]. - Basic net income per Class A share increased to $2.87 in 2025 from $2.51 in 2024, marking a rise of 14.3% [34]. - Total operating costs and expenses for 2025 were $613.2 million, up from $576.5 million in 2024, indicating a rise of 6.4% [34]. - Income from operations for 2025 was $1,008.1 million, compared to $919.0 million in 2024, reflecting an increase of 9.7% [34]. - The gross adjusted EBITDA margin improved to 82% in 2025, compared to 81% in 2024 [34]. - Income before income tax expense for 2025 was $798.4 million, an increase from $730.8 million in 2024 [34]. Revenue and Costs - Total revenues for the fourth quarter of 2025 were $404.2 million, compared to $395.9 million in the prior-year quarter, driven by higher tariff rates and third-party services [7][22]. - Total revenues for Q4 2025 reached $404.2 million, a 2.1% increase from $395.9 million in Q4 2024 [36]. - Total operating costs and expenses for Q4 2025 were $152.6 million, consistent with $152.9 million in Q4 2024 [36]. - Operating and maintenance expenses totaled $92.8 million in Q4 2025, compared to $92.7 million in Q4 2024, indicating stable cost management [36]. Operational Metrics - Throughput volumes decreased by 4% for oil terminaling, 1% for gas processing, and 5% for water gathering in the fourth quarter of 2025, primarily due to lower production caused by severe winter weather [5][10]. - Gas gathering throughput averaged 456 Mcf of natural gas per day in Q4 2025, slightly down from 463 Mcf per day in Q4 2024 [40]. - Crude oil gathering throughput was 118 bopd in Q4 2025, a decrease from 120 bopd in Q4 2024 [40]. - Hess Midstream LP's gas processing throughput averaged 444 Mcf of natural gas per day in Q4 2025, down from 447 Mcf per day in Q4 2024 [40]. Capital Expenditures and Investments - Capital expenditures decreased by 44% to $47.6 million in the fourth quarter of 2025, down from $84.3 million in the prior-year quarter, due to the completion of the gas compression capacity expansion [11][23]. - A new compressor station was placed in service in January 2026, providing approximately 50 MMcf/d of installed capacity, with potential for future expansion [10]. Shareholder Returns - Quarterly cash distribution increased to $0.7641 per Class A share for the fourth quarter of 2025, reflecting an increase of $0.0093 per share compared to the third quarter of 2025 [5][13]. Strategic Outlook - Hess Midstream is reaffirming its full year 2026 and long-term guidance issued on December 9, 2025 [5][14]. - The company plans to continue focusing on operational efficiency and cost management to enhance profitability in the upcoming quarters [36]. Mergers and Acquisitions - The merger with Chevron completed on July 18, 2025, resulted in Chevron indirectly owning approximately 37.9% of Hess Midstream [3].

These companies offer high-yielding and steadily rising income streams.The S&P 500's dividend yield is a paltry 1.1% these days. That's approaching its all-time low. As a result, fewer stocks are offering compelling income streams right now. However, there are some enticing options available. Delek Logistics Partners (DKL +0.46%), Hess Midstream (HESM +1.04%), and Plains All American Pipeline (PAA +0.92%) currently offer yields of up to 9%. Even better, all three companies recently increased their payouts. ...