Conclusion
Capital expenditure is very huge, which has consumed a lot of cash flow in the past three years.
The dividends yield is 1.13%， which is very low.
Hess ‘s stock price is $156.23 per share, which is equivalent to $47.98 billion in market capitalization.
From cash dividends, the stock price is seriously overvalued.
We reckon that Hess’s investment value is very minimal and a 10% dividends yield is reasonable.
Cash returned shareholders each year is very critical.
Disclaimer: The content is for reference only and does not constitute investment advice.
Balance sheet analysis
Hess ‘s total assets were $24 billion and $21.7 billion at December 31, 2023 and at December 31, 2022, respectively.
Property, plant and equipment , net were $17.4 billion as of December 31, 2023, accounting for 72.5% of total assets.
Total current assets were $3.4 billion as of December 31, 2023, consisting of 14.2% of total assets.
Total current liabilities were $3.27 billion as of December 31, 2023.
The current ratio was about 1 times for 2023.
Total liabilities were $14.4 billion as of December 31, 2023.
The debt ratio was 60% for 2023.
Profitability analysis
Hess ‘s total revenues and non-operating income were $10.6 billion, $11.6 billion and $7.6 billion in 2023, 2022 and 2021, respectively.
Total revenues and non-operating income in 2023 were down 8.6% year-on-year.
Total revenues and non-operating income in 2022 were up 52.6% year-on-year.
Net income was $1.74 billion, $2.45 billion and $890 million in 2023, 2022 and 2021, respectively.
The net profit margin was 16.4%, 21.1% and 11.7% in 2023, 2022 and 2021, respectively.
Net income attributable to Hess Corporation was $1.38 billion, $2.1 billion and $560 million in 2023, 2022 and 2021, respectively.
Cash flow analysis
Net cash provided by operating activities was $3.9 billion,$3.9 billion and $2.9 billion in 2023, 2022 and 2021, respectively.
Additions to property, plant and equipment were $3.88 billion, $2.49 billion and $1.58 billion in 2023, 2022 and 2021, respectively.
Free cash flow was $20 million, $1 billion and $1.32 billion in 2023, 2022 and 2021, respectively.
Cash dividends paid were $539 million, $465 million and $311 million in 2023, 2022 and 2021, respectively.
Introduction
Hess Corporation, incorporated in the State of Delaware in 1920, is a global E&P company engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas with production operations located in the United States (U.S.), Guyana, the Malaysia/Thailand Joint Development Area (JDA) and Malaysia. We conduct exploration activities primarily offshore Guyana, in the U.S. Gulf of Mexico, and offshore Suriname. At the Stabroek Block (Hess 30%), offshore Guyana, we and our partners have discovered a significant resource base and are executing a multi-phased development of the block. We currently have three FPSOs producing, and plan to have six FPSOs with an aggregate expected production capacity of more than 1.2 million gross bopd producing by the end of 2027. The discovered resources to date on the block are expected to underpin the potential for up to ten FPSOs.
Our Midstream operating segment, which includes Hess Corporation’s approximate 38% consolidated ownership interest in Hess Midstream LP at December 31, 2023, provides fee-based services, including gathering, compressing and processing natural gas and fractionating NGL; gathering, terminaling, loading and transporting crude oil and NGL; storing and terminaling propane, and water handling services primarily in the Bakken shale play in the Williston Basin area of North Dakota.
