Attractive Price-to-Earnings Ratio
Strong Price-to-Sales Ratio
Strong Return on Equity
Impressive Operating Profit Margin
Strong Interest Coverage Ratio
Adequate Current and Quick Ratios
💡 Strong Competitive Position
📈 Financial Strength
🌍 Commitment to Sustainability
🚀 Growth in Guyana
🔍 Exploration Potential
High Price-to-Cash-Flow Ratio
Elevated EV/EBITDA Ratio
Moderate Net Profit Margin
Moderate Debt Levels
Low Cash Ratio
⚠️ Market Challenges
Overall, Hess Corporation demonstrates a strong business quality with competitive advantages in key markets and a commitment to sustainability. Its future prospects are bolstered by significant growth opportunities in Guyana and a proactive exploration strategy. However, market challenges related to oil price volatility and investment requirements could pose risks moving forward.
Analysis Date: July 26, 2023
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$346.18
Current Market Price: $133.71
IV/P Ratio: 2.59x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
61.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for HES
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (14.85)
P/B ratio ≤ 1.5 (3.60)
Current ratio ≥ 2.0 (1.12x)
Long-term debt < Net current assets (26.20x)
Margin of safety (61.0%)
HES does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
A return on equity of 26% indicates effective management and strong profitability relative to shareholders' equity.
The operating profit margin of 42.68% suggests that the company is efficient in converting revenue into profit, indicating robust operational effectiveness.
The net profit margin of 21.56% is decent, but there could be room for improvement compared to industry leaders.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
26.00%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.04%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
63.02%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
21.56%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
An interest coverage ratio of 13.30 indicates that the company can comfortably meet its interest obligations, reflecting financial stability.
Current and quick ratios above 1 demonstrate that the company can cover its short-term liabilities, indicating solid liquidity.
A debt-to-equity ratio of 0.83 indicates that the company has a reasonable level of debt, but it could be a concern if interest rates rise.
The cash ratio of 0.41 suggests that the company may have limited cash reserves to cover short-term liabilities, warranting caution.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.77x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.12x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Hess has established a robust competitive advantage through its significant interests in high-potential regions like Guyana and the Bakken. The company has a unique value proposition, emphasizing high-return resource growth and industry-leading cash flow.
The company has demonstrated strong financial performance with a low debt-to-EBITDAX ratio of approximately 1x and plans to increase dividends significantly, appealing to income-oriented investors.
Hess has shown a long-standing commitment to environmental, social, and governance (ESG) standards, being recognized for its sustainability efforts. This positions the company favorably in an increasingly ESG-focused investment environment.
Hess has a substantial growth opportunity in Guyana with multiple developments expected to come online, including the Payara development in Q4 2023 and Yellowtail in 2025, which will significantly increase production capacity.
Hess continues to explore new opportunities in the Stabroek Block, having multiple ongoing drilling programs and a significant resource estimate that could lead to increased production and reserves.
The company faces potential headwinds from fluctuating oil prices and the need for significant investments in both clean energy and oil and gas sectors to meet global demand.