Stock fact sheet · data as of
Hess Midstream LP (HESM): fair value, margin of safety and Wheel Score
Ticker symbol HESM · Energy · Oil & Gas Midstream · United States · Partnership units · Blend Income
HESM trades as units of Hess Midstream LP, a limited partnership: owners receive a K-1 tax form instead of a 1099, and the payouts are distributions rather than dividends.
Is HESM undervalued?
HESM has a margin of safety of 37%: the stock closed at 31.80 on 5 Nov 2026 against a GLS average fair value of 50.30. 6 of the 9 valuation models that produced a number sit above the price. Our scans treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
There is a wide gap between GLS Growth (8.59) and 10 Cap (134.66). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
Ranked against every other company we cover, neither cheapness nor growth clearly wins for HESM, so the nightly engine files it under Blend (value score 47, growth score 36, out of 100). It also carries the Income tag (Income = a dividend yield of 4% or more).
Nine valuation models for HESM
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 51.81 | +63% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 16.27 | -49% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 47.33 | +49% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 11.74 | -63% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 8.59 | -73% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 134.66 | +323% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 103.65 | +226% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 46.06 | +45% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 32.60 | +3% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -18.39 | -158% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 32.00 | +1% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Hess Midstream LP scores 6 of 9 on the Piotroski F-score: a middling result that passes the "Piotroski 6 or more" Wheel Trade Filter. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 7.8/10 puts HESM among the more durable businesses we track: over up to ten years its returns on capital have stayed high, its margins steady and its balance sheet sound.
Returns on capital are moderate - ROIC 8.1%, ROE 62.1%, ROA 8.0% - with debt at 6.64 times equity and a free-cash-flow yield of 10.6%. Debt of 6.64 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is high at 9.84% (payout ratio 104%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual. Revenue comes mainly from Affiliate Services 96%, Third Party Services 5% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 8.1% |
|---|---|---|---|
| GLS Moat | 7.8 / 10 | ROE | 62.1% |
| Debt / equity | 6.64 | ROA | 8.0% |
| Free-cash-flow yield | 10.6% | Payout ratio | 104% |
| Institutions | 10 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 54: Fair
A Wheel Score of 54 keeps Hess Midstream LP under 70, the mark only a stock that passes all 9 Wheel Trade Filters can reach: it fails filter 5, can repay its debt - 3.8 years to repay its debt (over 3). The parts: value strong, premium strong, moat good, health good, red flags weak, option trading good, stability good.
Implied volatility is 35% on the near-the-money contracts 20-60 days out - inside the 35-60% sweet spot the Wheel Score rewards most: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 34,777 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 4.5M shares a day on a market cap of $6.6B, with a beta of 0.50 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that good.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Passes | Listed options with 1,000+ contracts of open interest and 100+ traded a day |
| 2 | A real business, not a gamble | Passes | Profitable over the last twelve months - not a speculative stock, fund or note |
| 3 | Below fair value | Passes | Trading below the nine-model average fair value (margin of safety above 0) |
| 4 | Financially healthy | Passes | Piotroski F-score 6 or more out of 9 (a company with no score on file passes) |
| 5 | Can repay its debt | Fails | 3.8 years to repay its debt (over 3) |
| 6 | No serious red flags | Passes | Red Flags score 60 or more out of 100 (earnings, margins, debt, analysts, filings and price checked the same way for every stock) |
| 7 | A premium worth selling | Passes | Implied volatility 25-80% (enough premium, not a lottery ticket) |
| 8 | Big enough | Passes | Market cap $1 billion or more |
| 9 | Not a penny stock | Passes | Share price $5 or more |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Strong | 37% below fair value | |
| Premium | Strong | implied volatility 35% | |
| Moat | Good | moat 7.8/10 | |
| Health | Good | Piotroski 6/9 | |
| Red Flags | Weak | Red Flags score 67/100 | |
| Option trading | Good | 2,648 contracts a day, 34,777 open interest | |
| Stability | Good | beta 0.50, $6.6B company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 1 Feb 2027, 88 days away - outside the window of a 30-45-day put sold today. The shares go ex-dividend on 5 Nov 2026 (0.7985 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Analysts upgraded HESM 1 time in the last 30 days with no downgrades; the latest action was an upgrade by Raymond James on 23 Oct 2026.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Oil & Gas Midstream
The 12 companies below are the closest to Hess Midstream LP by market cap within the Oil & Gas Midstream industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| SOBO South Bow Corporation | 34.05 | 45.58 | +25% | 50Fair | $7.1B |
| PAGP Plains GP Holdings LP | 26.93 | 67.82 | +60% | 41Weak | $5.3B |
| AM Antero Midstream Corporation | 19.86 | 27.31 | +27% | 44Weak | $9.4B |
| GLNG Golar LNG Limited | 44.88 | 34.79 | -29% | 40Weak | $4.6B |
| KNTK Kinetik Holdings Inc. | 51.17 | 203.51 | +75% | 47Weak | $4.1B |
| EE Excelerate Energy, Inc. | 34.29 | 63.78 | +46% | 80Good | $3.9B |
| DTM DT Midstream, Inc. | 117.58 | 81.85 | -44% | 34Weak | $12.0B |
| DKL Delek Logistics Partners, LP | 52.31 | 50.17 | -4% | 34Weak | $3.0B |
| VNOM Viper Energy, Inc. | 41.06 | 47.78 | +14% | 74Good | $14.7B |
| WES Western Midstream Partners, LP | 42.54 | 49.40 | +14% | 37Weak | $17.6B |
| PAA Plains All American Pipeline, L.P. | 25.21 | 51.86 | +51% | 50Fair | $17.8B |
| LPG Dorian LPG Ltd. | 49.43 | 84.86 | +42% | 80Good | $2.1B |
Scan the whole market the same way
A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the top 10 stocks that pass all 9 Wheel Trade Filters, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about HESM
Is HESM undervalued right now?
By the GLS models, yes: at 31.80 the stock is 37% below the average fair value of 50.30 (data as of 5 Nov 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of HESM and what does it mean?
HESM scores 54 out of 100 (Fair) - it fails Wheel Trade Filter 5. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for HESM?
50.30 per share as of 5 Nov 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Hess Midstream LP report earnings next?
The next earnings report is due on 1 Feb 2027, 88 days from the data date of 5 Nov 2026. The Calendars page lists every upcoming report with its time of day.
Does HESM have listed options, and how liquid are they?
Yes. The nightly snapshot found 104 listed contracts with 34,777 open interest across all expiries and implied volatility of 35% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.
Is HESM a partnership?
Yes. HESM trades as units of Hess Midstream LP, a limited partnership: owners receive a K-1 tax form instead of a 1099, and the payouts are distributions rather than dividends.