Core Insights - Hess Midstream Partners LP reported revenue of $420.9 million for the quarter ended September 2025, reflecting an 11.2% increase year-over-year, with EPS at $0.75 compared to $0.63 in the same quarter last year [1] - The revenue was slightly below the Zacks Consensus Estimate of $421.33 million, resulting in a revenue surprise of -0.1%, while the EPS exceeded the consensus estimate of $0.73, yielding an EPS surprise of +2.74% [1] Financial Performance Metrics - Gas gathering throughput volumes were reported at 480.00 MMcf/d, slightly above the estimated 478.70 MMcf/d [4] - Crude oil gathering throughput volumes were 123.00 MBbl/d, below the estimated 129.46 MBbl/d [4] - Water gathering throughput volumes were 137.00 MBbl/d, lower than the estimated 144.66 MBbl/d [4] - Crude oil terminaling throughput volumes were 130.00 MBbl/d, compared to the estimated 137.31 MBbl/d [4] - NGL loading throughput volumes were 18.00 MBbl/d, exceeding the estimated 14.97 MBbl/d [4] - Gas processing throughput volumes were 462.00 MMcf/d, slightly below the estimated 463.06 MMcf/d [4] Revenue and EBITDA Analysis - Revenue from gathering was $227.3 million, compared to the average estimate of $229.83 million [4] - Revenue from terminaling and export was $34 million, slightly below the estimated $34.67 million [4] - Revenue from processing and storage was $159.6 million, compared to the average estimate of $176.62 million [4] - Adjusted EBITDA for terminaling and export was $23.4 million, below the estimated $24.63 million [4] - Adjusted EBITDA for gathering was $166 million, exceeding the average estimate of $161.08 million [4] Stock Performance - Shares of Hess Midstream Partners have returned +1% over the past month, compared to the Zacks S&P 500 composite's +1.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Hess Midstream LP (NYSE:HESM) is recognized as one of the 15 Extreme Dividend Stocks to buy according to hedge funds [1] - The company announced a 2.4% increase in its quarterly dividend to $0.7548 per share, marking its 32nd consecutive quarter of dividend growth [2] - For Q3 2025, Hess Midstream reported a net income of $176 million, a slight decrease from $180 million in Q2, while adjusted EBITDA rose to $321 million from $316 million [3] Dividend and Financial Performance - The quarterly dividend increase will be paid on November 14 to shareholders of record as of November 6, with an ex-dividend date of November 6 [2] - The gross adjusted EBITDA margin remained strong at approximately 80%, exceeding the 75% target, indicating solid operating leverage [3] - The third-quarter distribution included a targeted 5% annual growth per Class A share, along with an additional boost from a $100 million share repurchase [3] Analyst Ratings and Price Target - Raymond James analyst J.R. Weston lowered Hess Midstream's price target to $35 from $48 while maintaining an Outperform rating, reflecting adjustments across the midstream suppliers group ahead of Q3 earnings [4] - Hess Midstream provides midstream services, including gathering, processing, storing, and transporting crude oil, natural gas, and natural gas liquids [4]

Financial Performance - Total revenues for Q3 2025 reached $420.9 million, a 11.0% increase from $378.5 million in Q3 2024[15] - Net income attributable to Hess Midstream LP for Q3 2025 was $97.7 million, compared to $58.6 million in Q3 2024, representing a 66.7% increase[15] - The company reported a basic net income per Class A share of $0.75 for Q3 2025, up from $0.63 in Q3 2024, marking a 19.0% increase[15] - Net income for the nine months ended September 30, 2025, was $516.6 million, an increase of 6.3% compared to $486.9 million in 2024[22] - Consolidated net income for Q3 2025 was $175.5 million, with net income attributable to Hess Midstream LP at $97.7 million, or $0.75 basic earnings per Class A Share[127] - Revenues for the three months ended September 30, 2025, increased to $420.9 million, up from $378.5 million in the same period of 2024, representing an increase of 11.4%[96] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $936.7 million, compared to $844.2 million for the same period in 2024, reflecting a growth of 10.9%[98] - Adjusted EBITDA for Q3 2025 was $320.7 million, an increase of $33.8 million compared to Q3 2024[129] Assets and Liabilities - Total assets as of September 30, 2025, were $4,437.7 million, up from $4,151.0 million as of December 31, 2024, reflecting a 6.9% growth[11] - Long-term debt as of September 30, 2025, was $3,764.9 million, up from $3,449.4 million as of December 31, 2024, reflecting an increase of 9.1%[11] - Total liabilities increased to $4,011.2 million as of September 30, 2025, from $3,685.7 million as of December 31, 2024, representing an increase of 8.8%[11] - Total current assets increased to $168.2 million as of September 30, 2025, compared to $149.4 million as of December 31, 2024, a growth of 12.5%[11] - Total debt as of September 30, 2025, had a carrying value of $3,794.9 million and a fair value of approximately $3,840.1 million[81] Cash Flow and Expenses - Net cash provided by operating activities increased to $738.2 million, up from $681.8 million, reflecting a growth of 8.3%[22] - Operating and maintenance expenses for Q3 2025 were $98.1 million, an increase from $89.0 million in Q3 2024, indicating a 10.2% rise[15] - Interest expense, net, for the nine months ended September 30, 2025, was $168.9 million, compared to $150.0 million for the same period in 2024, reflecting an increase of 12.6%[98] - The company reported depreciation expense of $159.9 million, an increase of 5.3% from $151.8 million in 2024[22] - Total operating costs and expenses in Q3 2025 were $162.0 million, up from $146.8 million in the prior-year quarter, primarily due to higher employee costs and depreciation[129] Shareholder Activities - The company declared a quarterly cash distribution of $0.7548 per Class A Share for the quarter ended September 30, 2025, an increase of $0.0178 per share compared to the previous quarter[102] - The company repurchased 5,151,842 Class B Units for approximately $190.0 million on May 9, 2025[47] - In Q2 2025, the company repurchased $10.0 million of Class A Shares, receiving 267,532 shares[50] - In Q3 2025, the company repurchased $70.0 million of Class A Shares, receiving 1,706,118 shares[51] - The company incurred approximately $2.9 million in costs related to the repurchase transactions during the nine months ended September 30, 2025, compared to $2.4 million in the same period of 2024[55] Mergers and Acquisitions - The company completed a merger with Chevron on July 18, 2025, resulting in Chevron becoming the direct parent of Hess[31] - The successful integration of Hess' business following the Merger is critical for realizing anticipated benefits and synergies, which may impact financial results[218] - The Merger, completed in July 2025, may disrupt current plans or operations and affect employee retention, potentially impacting financial performance[219] Market and Operational Insights - Revenues from fee-based commercial agreements with Chevron for the three and nine months ended September 30, 2025, were 96% and 97%, respectively, compared to 98% for the same periods in 2024[63] - The company generates substantially all revenues through long-term commercial agreements with Chevron, minimizing direct exposure to commodity price fluctuations[209] - The markets for oil and natural gas are expected to remain volatile, which could impact production rates and investments by the company and its partners[178][179] - The company operates in three reportable segments: gathering, processing and storage, and terminaling and export, evaluated based on Adjusted EBITDA[93] Debt and Financing - The Partnership issued $800.0 million of 5.875% fixed-rate senior unsecured notes due 2028, redeeming the previous 5.625% notes due 2026, resulting in an extinguishment loss of approximately $2.0 million[74] - The Partnership received an investment grade rating of 'BBB-' from S&P Global Ratings on July 24, 2025, allowing for more flexible debt covenants[75] - As of September 30, 2025, the Partnership had $1.4 billion in senior unsecured credit facilities, with $356.0 million drawn from the revolving credit facility and $370.0 million from the Term Loan A facility[79] - A 15% increase or decrease in interest rates would affect the fair value of fixed-rate debt by approximately $75.4 million or $71.9 million, respectively[211] Risks and Controls - There were no changes in internal control over financial reporting that materially affected the company's controls as of September 30, 2025[213] - The company has not implemented any derivative instruments to hedge interest rate exposure as of September 30, 2025[210] - Risks associated with the Merger include potential operational challenges and unforeseen expenses that could adversely affect financial results and share prices[218]

Financial Data and Key Metrics Changes - For Q3 2025, net income was $176 million, a slight decrease from $180 million in Q2 2025. Adjusted EBITDA increased to $321 million from $316 million in the previous quarter, primarily due to higher third-party gas gathering and processing throughput volumes [9][10] - Total revenues, excluding pass-through revenues, increased by approximately $7 million, with gathering revenues up by about $4 million and processing revenues up by approximately $3 million [9][10] - The gross adjusted EBITDA margin for Q3 was maintained at approximately 80%, above the target of 75%, indicating strong operating leverage [10] Business Line Data and Key Metrics Changes - Throughput volumes averaged 462 million cubic feet per day for gas processing, 130,000 barrels of oil per day for crude terminaling, and 137,000 barrels of water per day for water gathering, with a 3% increase in gas gathering and processing compared to Q2 [5][10] - Capital expenditures for Q3 were approximately $80 million, with adjusted free cash flow of about $187 million [10][12] Market Data and Key Metrics Changes - The company expects fourth quarter volumes to be relatively flat compared to Q3 due to lower expected third-party volumes and planned maintenance at the Little Missouri Ford gas plant [6][11] Company Strategy and Development Direction - The company remains committed to a strategy prioritizing the return of capital to shareholders, supported by excess free cash flow and a long-term leverage target of three times adjusted EBITDA [7][12] - The removal of the Kappa gas plant from future plans is expected to lead to significantly lower capital expenditures, enhancing free cash flow for shareholder returns [6][12] Management's Comments on Operating Environment and Future Outlook - Management noted that gas represents 75% of revenues, and future growth is expected to be driven by gas-to-oil ratios (GORs) as Chevron operates three rigs, maintaining oil production while allowing gas volumes to increase [17][36] - The company anticipates continued growth in free cash flow through 2027, supporting targeted annual distribution growth of at least 5% [12][31] Other Important Information - A $100 million share and unit repurchase was executed in Q3, and distributions were increased by 2.4%, approximately 10% on an annualized basis per Class A share [5][11] - Full-year 2025 capital expenditures are now expected to total approximately $270 million, with adjusted free cash flow projected at $760 million to $770 million [12] Q&A Session Summary Question: Trends in Bakken and GORs - Management indicated that GORs have not been increasing due to active drilling programs, and they expect oil to plateau while gas volumes increase over time [16][17] Question: 2028 MVC Expectations - Guidance for 2026 and 2028 MVCs will be provided after the budget process concludes in December [18][19] Question: Future Buybacks - The company expressed confidence in maintaining financial flexibility for capital returns, including potential share repurchases, supported by lower capital expenditures [20][24] Question: CapEx Outlook - Management confirmed that expected capital expenditures will be significantly lower than previous guidance, with a base level around $125 million for ongoing operations [23][24] Question: Relationship with Chevron - The integration with Chevron has been positive, with successful board meetings and distribution increases, indicating a strong partnership moving forward [26][27] Question: 2026 EBITDA Outlook - Management expects EBITDA to be flat in 2026 despite rising gas volumes, with further details to be provided after the budget process [30][31]

Financial Performance - Third quarter 2025 net income was $175.5 million, an increase from $164.7 million in the same quarter of 2024, with net income attributable to Hess Midstream LP at $97.7 million, or $0.75 per Class A share, compared to $0.63 per share in Q3 2024[3][9] - Revenues for Q3 2025 were $420.9 million, up from $378.5 million in Q3 2024, primarily due to higher physical volumes and tariff rates[8] - Net income for Q3 2025 was $175.5 million, an increase from $164.7 million in Q3 2024, representing a growth of 4.8%[23] - Total revenues for Q3 2025 reached $420.9 million, up from $378.5 million in Q3 2024, indicating a year-over-year increase of 11.1%[24] - Adjusted EBITDA for Q3 2025 was $320.7 million, compared to $286.9 million in Q3 2024, reflecting a growth of 11.8%[24] - Net income attributable to Hess Midstream LP for the nine months ended September 30, 2025, was $259.6 million, compared to $152.7 million in 2024, reflecting a significant increase of 69.9%[34] - Basic earnings per Class A share rose to $2.15 for the nine months ended September 30, 2025, compared to $1.82 in 2024, marking a growth of 18.2%[34] Cash Flow and Distributions - Adjusted Free Cash Flow was $186.8 million[5][10] - The company completed a $70 million repurchase of Class A shares and a $30 million repurchase of Class B units, leading to an increase in quarterly cash distribution to $0.7548 per Class A share, up $0.0178 from Q2 2025[5][14] - Adjusted free cash flow guidance for Q4 2025 is projected to be between $190 million and $200 million[25] Operational Metrics - Throughput volumes increased by 10% for gas processing, 7% for oil terminaling, and 7% for water gathering compared to the prior-year quarter[5][11] - Gas gathering throughput volumes for the third quarter of 2025 averaged 480 Mcf per day, up from 442 Mcf per day in the third quarter of 2024, representing an increase of 8.6%[40] - Crude oil gathering throughput volumes for the nine months ended September 30, 2025, increased to 122 bopd, compared to 112 bopd in 2024, reflecting a growth of 8.9%[40] Capital Expenditures - Capital expenditures for Q3 2025 totaled $79.8 million, down from $96.3 million in the prior-year quarter, primarily for gas compression and pipeline infrastructure expansion[13] - The company is reducing its full-year 2025 capital expenditure guidance to approximately $270 million due to the suspension of the Capa gas plant project[16] Debt and Ratings - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- by S&P on July 24, 2025[10] Future Projections - For Q4 2025, Hess Midstream expects net income of $170 - $180 million and Adjusted EBITDA of $315 - $325 million, implying a full-year expected net income of $685 - $695 million[15] - The company expects net income for the full year 2025 to be in the range of $685 million to $695 million[25] Other Financial Metrics - Gross margin improved to 62% in Q3 2025, compared to 61% in Q3 2024[24] - The gross adjusted EBITDA margin for Q3 2025 was 82%, up from 81% in Q3 2024[24] - Interest expense for Q3 2025 was $57.1 million, compared to $51.8 million in Q3 2024[32] - Operating and maintenance expenses for the nine months ended September 30, 2025, totaled $277.8 million, compared to $254.6 million in 2024, an increase of 9.1%[34] - Interest expense for the nine months ended September 30, 2025, was $168.9 million, up from $150.0 million in 2024, indicating an increase of 12.6%[34] Shareholder Information - Following the merger with Chevron, Chevron now indirectly owns approximately 37.9% of Hess Midstream[6] - The weighted average Class A shares outstanding increased to 120.9 million for the nine months ended September 30, 2025, compared to 84.0 million in 2024, reflecting a growth of 43.6%[34]

Core Insights - Companies with a strong history of dividend payments and increases are attractive to income-focused investors, with CareTrust REIT, Hess Midstream, and Kimberly-Clark recently announcing dividend hikes and offering yields up to approximately 8% [1] CareTrust REIT - CareTrust REIT Inc. is a real estate investment trust focused on seniors housing and healthcare-related properties [2] - The company has raised its dividends annually for the last 10 years, with the most recent increase on March 18, raising the quarterly payout from $0.29 to $0.335 per share, equating to an annual figure of $1.34 per share [3] - As of June 30, CareTrust's annual revenue was $277.03 million, with Q2 2025 revenues of $112.47 million and EPS of $0.43, both exceeding expectations [4] Hess Midstream - Hess Midstream LP operates midstream assets and provides fee-based services, having increased dividends for the last eight years [5] - The latest dividend hike on July 28 raised the quarterly payout from $0.7098 to $0.737 per share, resulting in an annual figure of $2.95 per share, with a current dividend yield of 8.64% [5] - The company's annual revenue as of June 30 was $1.57 billion, with Q2 2025 revenues of $414.20 million and EPS of $0.74, both surpassing market expectations [6] Kimberly-Clark - Kimberly-Clark Corp. is engaged in the manufacturing and marketing of personal care products on an international scale [7]

Core Insights - Hess Midstream LP (NYSE: HESM) has been under coverage for nearly three months, with fundamentals being acceptable but insufficient drivers for further upside, currently trading in the low-to-mid $30s range [1] Company Overview - The analyst has experience in the logistics sector for almost two decades and has been involved in stock investing and macroeconomic analysis for nearly a decade, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1] Investment Strategy - The analyst's investment approach includes diversification across different industries and market cap sizes, with holdings for retirement and trading profits [1] - The analyst entered the US market in 2020, gaining insights through a trading account managed for a relative before opening their own account [1] Market Context - The analyst has been utilizing analyses from Seeking Alpha to compare with their own evaluations in the Philippine market since discovering the platform in 2018 [1]

Group 1 - Hess Midstream LP (NYSE:HESM) is considered one of the most profitable oil stocks to invest in currently, with Eagle Global Advisors LLC increasing its position by 53.7% in Q2, acquiring 857,669 shares, making it the firm's fourth largest holding [1] - The company is expected to benefit from new drilling plans, although near-term growth prospects may appear modest due to reduced throughput in its system [2] - Hess Midstream LP has a strong contract structure with minimum volume commitments (MVC) extending through 2033, positioning it well for guaranteed minimum revenue [3] Group 2 - Hess Midstream LP operates midstream assets in Texas and provides fee-based services to Hess and third-party customers, with three main segments: Gathering, Processing and Storage, and Terminaling and Export [4]

Core Insights - The energy sector has several oversold stocks that present potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Nextdecade Corp (NASDAQ:NEXT) has an RSI of 27.7, with a recent stock price of $6.60 after a 38% decline over the past month [8] - BW LPG Ltd (NYSE:BWLP) has an RSI of 29.8, closing at $13.90 after an 11% drop in the last five days [8] - Hess Midstream LP (NYSE:HESM) has an RSI of 27.5, with shares rising to $34.65 despite a 16% decline over the past month [8] Group 2: Company Updates - Nextdecade was downgraded from Buy to Hold by TD Cowen, with a price target reduction from $11 to $8 [8] - BW LPG announced the sale of BW Lord, emphasizing its strategy to modernize its fleet and capitalize on asset values [8] - Hess Midstream upgraded its FY25 gas gathering volumes guidance, focusing on cash flow stability and shareholder returns [8]

Core Insights - The energy sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Nextdecade Corp (NASDAQ:NEXT) has an RSI of 27.7, with a stock price decline of approximately 38% over the past month, closing at $6.60 [8] - BW LPG Ltd (NYSE:BWLP) has an RSI of 29.8, with a stock price drop of around 11% in the last five days, closing at $13.90 [8] - Hess Midstream LP (NYSE:HESM) has an RSI of 27.5, with a stock price decrease of about 16% over the past month, closing at $34.65 [8] Group 2: Company Updates - Nextdecade was downgraded from Buy to Hold by TD Cowen analyst Jason Gabelman, with a reduced price target from $11 to $8 [8] - BW LPG announced the sale of BW Lord, emphasizing its strategy to modernize its fleet and capitalize on strong asset values [8] - Hess Midstream upgraded its FY25 gas gathering volumes guidance, focusing on cash flow stability and shareholder returns [8]