HES Investment Analysis Report & Stock Research, Hess Corp.

Hess Corporation (HES)

HES Stock Report

2-Year Price History

View Larger HES Chart
NYSE:HES
$61.19
(3/19 4:00PM)
-0.8%
Open$61.89 Mkt Cap$20.0 Billion
High$62.24 52Wk High$69.74
Low$60.46 52Wk Low$46.33
Volume4.0 Million Avg Vol 10D2.8 Million

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HES Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, HES the high and low end of the Price to Sales per share ratios are 0.82x and 0.41x respectively.

Notice that HES's current Price to Sales per share ratio is 0.68x, which is above its historical average only slightly. So, while not a major concern it is worth noting that from a value perspective HES does not look undervalued on a Price to Sales basis. However, were the Price to Sales ratio to drop by 10% (the historical average) then we would become more positive on this stock.

HES Cash Earnings

Looking at HES specifically in their Cash Earnings capabilities, Ockham views HES as above its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from HES. For example, HES's Cash Earnings ratio per share has fluctuated between 3.86 and 7.79 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where HES is with respect to prior business periods.

So when we look at HES, what does this slightly higher than historical level of Price to Cash Earnings mean? From the Ockham perspective, it basically represents that the market has a higher stock price attributed to this level of Cash Earnings than compared to normal. So while we view this as a negative from a valuation perspective, it certainly doesn't mean that HES couldn't rapidly improve in its value from other factors or a decline in stock price. The current Price to Cash Earnings level of 6.70 is 14% above the historical norm as calculated at Ockham. So a decline in stock price, or more hopefully, an increase in HES's Cash Earnings levels would improve our outlook for the stock.

HES Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.

When reviewing dividend yields for HES, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. HES’s estimated annual dividend is $0.40 resulting in a current dividend yield of 0.65%. The highest dividend yield from HES over recent history was 3.09% while the lowest dividend yield was 0.29%. It is never a good sign for a company to pay significantly lower dividends, in this case 61.54% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.

Peer Comparison

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Hess Corp. Industry Grouping

(3/19/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including HES) 15.87 3.13 » 24.60 1.46 0.52 » 2.02 17.73% 16.95%
*10 year range does not include current year values
Marathon Oil Corp. MRO $22.7 Billion $31.98 5.46 2.39 » 8.56 0.42 0.17 » 0.80 3.45% 21.14%
Enterprise Products Partners LP EPD $20.4 Billion $33.19 11.42 4.20 » 24.23 0.83 0.31 » 1.14 25.11% 10.40%
Hess Corp. HES $20.0 Billion $61.19 6.70 1.84 » 10.17 0.68 0.26 » 1.08 12.06% 17.36%
Enbridge, Inc. ENB $18.0 Billion $47.74 8.13 4.71 » 12.51 1.51 0.75 » 1.90 16.88% 16.70%
National Oilwell Varco, Inc. NOV $17.8 Billion $42.46 9.39 3.13 » 30.07 1.45 0.55 » 2.99 40.55% 13.28%
Talisman Energy, Inc. TLM $17.6 Billion $17.23 44.95 1.22 » 47.61 3.09 0.81 » 3.26 2.67% 23.24%
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11:23P, Mar. 09,2010 HES $60.50 Hess Corp.
Zero Hedge

The Chief Executive of HES Was Discussed on Zero Hedge

Keeping up with a CEO is one way that we try to better understand the direction of a company, and there was talk about HES management on Zero Hedge.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Hess Corporation has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on HES because it trades within the price range that we would expect given current market conditions and fundamentals.

“… “That’s 10 times the shift we might see in any given year,” said Carl HESS, head of Towers Watson’s investment consulting business. …”

1:19P, Mar. 05,2010 HES $60.88 Hess Corp.
Power Lunch

A Discussion of HES's CEO Occurred on Power Lunch

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of HES's CEO on Power Lunch.

The Motley Fool CAPS data suggests that investors believe Hess Corporation will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HES has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HES.

“… Investors are HESS tan to buy it because the government's selling. > > it's the mother of all overhangs, I agree with that. …”

7:51A, Jan. 27,2010 HES $59.50 Hess Corp.
Imus In The Morning

The Chief Executive of HES Was Discussed on Imus In The Morning

Staying in touch with the latest management news is one way we are keeping our clients informed. Notice, RazorWire has a news capture related to HES's CEO.

Hess Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; HES has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… And HESS, fourth quarter results also 1. 10 per share and estimates were for 91 cents a share and revenue was ahead of estimates at 8. 56 billion. …”

11:04A, Jan. 20,2010 HES $61.04 Hess Corp.
The Call

Heard on The Call: CEO of HES Discussed

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of HES's CEO on The Call.

Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; HES has received less coverage from the financial media in business television and blogs. Hess Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals.

“… Whether you're talking at schlumberger into the service group like HESS or even the coal companies like massey. You see right across the board, pressure on the big international ... …”

6:40A, Jan. 19,2010 HES $61.05 Hess Corp.
Imus In The Morning

A Discussion of HES's CEO Occurred on Imus In The Morning

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of HES's CEO on Imus In The Morning.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Hess Corporation has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on HES because it trades within the price range that we would expect given current market conditions and fundamentals.

“… What's HESS name, chris van hollen, the democratic congressional head guy, let me give you a vote from him, he said, the coakley-brown race, why would you hand the keys to the ... …”

3:45P, Dec. 29,2009 HES $61.05 Hess Corp.
Closing Bell

A Discussion of HES's CEO Occurred on Closing Bell

CEO's are the strategic leaders of their companies, so any mention of them will garner special interest from us.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Hess Corporation has actually sunk a bit in comparison to the others. Take notice of the news on this stock because it is up $4.55 since the close of trading yesterday. The Ockham valuation currently has a Fairly Valued stance on HES because it trades within the price range that we would expect given current market conditions and fundamentals. But as the price has risen in the last week, we have begun to look slightly less favorably on the valuation.

“… In today's edition of best of the worse I bring you HESS, up at a time when the energy sector is lower. HESS the strong stock up for the fourth consecutive day, up six of the ... …”

1:02P, Dec. 21,2009 HES $58.92 Hess Corp.
Power Lunch

Heard on Power Lunch: CEO of HES Discussed

Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of HES's CEO on Power Lunch.

The Motley Fool CAPS data suggests that investors believe Hess Corporation will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HES has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HES.

“… HESS and halle burt. Health care, though the best performing sector today. Best performing sector as well so aetna, cigna, humana, all seeing nice gains today. …”

3:39P, Dec. 14,2009 HES $56.27 Hess Corp.
Countdown to the Closing Bell

Did You See HES's CEO Hess on Countdown to the Closing Bell?

CEO's are the strategic leaders of their companies, so any mention of them will garner special interest from us.

The Motley Fool CAPS data suggests that investors believe Hess Corporation will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HES. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HES has been less covered in the news compared to the rest of our universe of stocks.

“… Buy natural gas versus crude oil, we think the way to do this using-- is to buy chesapeake versus long chesapeake short HESS. A good way to capture. …”

11:00A, Nov. 20,2009 HES $57.99 Hess Corp.
Squawk On The Street

The Chief Executive of HES Was Discussed on Squawk On The Street

CEO's are the strategic leaders of their companies, so any mention of them will garner special interest from us.

Hess Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. From a news flow perspective, there is nothing out of the ordinary in where HES ranks in comparison to other stocks we follow.

“… the HESS corp. , from 75 to 65. Dell down 54%. Lower than expected sales of lost market share. Not a good report. Foot locker, a third quarter loss of 6 million from a profit... …”

5:46P, Nov. 17,2009 HES $58.38 Hess Corp.
Fast Money

Did You See HES's CEO Hess on Fast Money?

Hess Corporation's CEO is obviously vital to his company, so we believe any news covering him is worth knowing for investors.

The Ockham valuation currently has a Fairly Valued stance on HES because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Hess Corporation has actually sunk a bit in comparison to the others. Be aware that crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… what about HESS? > > HESS has been tough to figure out because HESS has underperformed oil, only up 8% for the year. Normally it's very highly leveraged to the price of oil I w... …”

View All Hess Corp. Stock News

Key Fundamentals

HES - Hess Corporation Fundamentals
Price (3/19 4:00PM) $61.19
Volume (3/19 4:00PM) 4.0 Million
Last Close Price $61.66
10 Day Average Volume 2.8 Million
13 Week Price Range $55.89 - $66.49
52 Week Price Range $46.33 - $69.74
LTM Revenue $29.6 Billion
 
Shares Outstanding (12/2009) 327.2 Million
Market Capitalization $20.0 Billion
Shares Held By Institutions 259.3 Million
Institutional Holders 751
% Shares Held By Institutions 79.30%
Earnings Per Share (EPS) $2.27
P/E Ratio 27.00
Book Value Per Share $40.90
 
Gross Margin 20.20%
Annual Dividend 0.40
Dividend Yield 0.70%
Beta 0.94
Fiscal Year Ends December

About Hess Corp.

Hess Corporation is considered to operate in the Basic Materials sector. They specifically operate in the Oil & Gas Refining/Marketing business segment contained within the Energy industry.

A global integrated energy company that operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R).