Hess Midstream Increases Distribution Despite Declining Volumes
On August 3, Hess Midstream LP (NYSE:HESM) reported second-quarter results showing a decline in net income and revenue but an increase in its quarterly distribution. The company raised the payout to $0.7888 per Class A share despite falling oil terminaling volumes by 15% and water gathering by 12%. Adjusted Free Cash Flow rose due to reduced capital expenditures, which dropped 56%, and lower operating costs. Management reaffirmed its full-year guidance for Adjusted EBITDA between $1.23 billion and $1.28 billion. The distribution increase reflects confidence in future volume recovery from new-well activity, though current throughput trends remain a concern. The stock trades at a forward P/E of 9.91, which may not fully reflect the potential for continued free cash flow growth or higher distributions. Hedge fund ownership slightly declined to 27 funds, and short interest remains elevated at 6.63% of float. The company’s balance sheet shows $256 million drawn on its revolving credit facility as it continues to manage distribution obligations while navigating volume declines.
Topics: cash_flow dividend_increase midstream revenue_decline