Hess Midstream LP Share Price Has Underperformed the Market
The share price of Hess Midstream LP (NYSE:HESM) has seen a modest increase of 2.3% in the last year. Over the last five years, the stock has performed better with a 60% increase, but has still underperformed compared to the market. However, when taking into account the dividends received, the overall return is market beating. This indicates that while shareholders may not be seeing substantial gains from the share price alone, they are still benefiting from the company’s dividend payments.
Examining the Fundamentals of Hess Midstream: A Long-Term Perspective
To better understand the long-term performance of Hess Midstream, it is important to analyze the fundamental aspects of the company. While share prices are influenced by investor sentiment, examining the company’s earnings per share (EPS) provides insights into the underlying business performance. Over the past five years, Hess Midstream has experienced a growth rate of 4.2% in its EPS. This growth rate is slower than the share price growth of 10% per year over the same period. However, considering the consistent earnings growth over the five-year period, it is not surprising that the market holds a higher opinion of the company now compared to five years ago.
(Source: Simply Wall St)
Growth vs. Share Price: How Investor Sentiment Has Changed for Hess Midstream
The interaction between a company’s share price and its earnings per share (EPS) provides insights into how investor sentiment has evolved over time. In the case of Hess Midstream, the market has shown a higher opinion of the company over the past five years, as indicated by the faster share price growth compared to EPS growth. This can be attributed to the consistent earnings growth over the same period. While markets are driven by investor sentiment, it is essential to consider the underlying business performance when evaluating a stock.
Total Shareholder Return: Including Dividends Boosts Performance for Hess Midstream
It is crucial to consider the total shareholder return (TSR), which includes the share price return as well as the value of dividends and other benefits. In the case of Hess Midstream, the TSR for the last five years was 139%, exceeding the share price return previously mentioned. This indicates that the dividends paid by the company have significantly boosted the overall shareholder return. By considering both the share price return and dividends, investors can gain a more comprehensive understanding of the return generated by a stock.
Hess Midstream: A Different Perspective on Returns and Potential Risks
Although Hess Midstream shareholders have seen a positive return of 11% for the year (including dividends), this is below the market average. However, when looking at the returns over the past five years, the performance is more impressive, with an average yearly return of 19%. This indicates that Hess Midstream has been well received by the market over time. It is important to note that while market conditions can influence share prices, there are other factors, such as potential risks, that investors should consider. Conducting a comprehensive analysis is crucial when evaluating the value and potential risks of a stock.
Please note that the market returns mentioned in this article reflect the average returns of stocks currently trading on American exchanges.
Valuation is a complex process, but with our comprehensive analysis, you can determine whether Hess Midstream is potentially over or undervalued. Our analysis provides fair value estimates, along with insights into risks and warnings, dividends, insider transactions, and financial health. Visit the following link for a free analysis: View the Free Analysis
If you have any feedback or concerns about the content of this article, please get in touch with us directly. Alternatively, you can email our editorial team at [email protected].
Please note that this article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using an unbiased methodology. Our articles are not intended to be financial advice. They do not constitute a recommendation to buy or sell any stock and do not take into account individual objectives or financial situations. Our analysis aims to provide long-term focused analysis driven by fundamental data. It is important to consider the latest price-sensitive company announcements and qualitative material that may not be incorporated into our analysis. Simply Wall St has no position in any stocks mentioned.
Analyst comment
Positive news: The total shareholder return for Hess Midstream LP over the past five years has been 139%, exceeding the share price return. This indicates that the dividends paid by the company have significantly boosted the overall shareholder return.
As an analyst, it is expected that the market will continue to view Hess Midstream favorably due to its consistent earnings growth and the boost provided by dividends. However, investors should conduct comprehensive analysis and consider potential risks before making investment decisions.
