HE HESM Hess Midstream LP Loading... : Investor Sentiment and Bull/Bear Views

The author's research concludes HESM is a great buy at a 10.5% yield, with 2027 distributions of $414M versus free cash flow guidance of $525-575M, leaving the dividend covered by roughly 27% even at the low end. Support comes from Chevron contracts extended through 2045, minimum revenue commitments through 2033, and offsetting factors for a 5% Bakken volume decline in 2027 including new DJ basin assets, CPI escalators and a 20% Saddlehorn stake. The author frames the valuation as cheap enough to deliver a decent return even with declining earnings and dividend cuts, which is presented as a margin-of-safety illustration rather than the base case. Main stated risk is declining Bakken volumes and potential dividend cuts, though the author says near-term cuts are not the base case.

The author discloses holding Hess Midstream within a roughly 27% income block that does most of the portfolio's paying, alongside O and Chevron. The position is held for income generation rather than growth. No new purchase or catalyst is stated.

The author says Hess Midstream cannot be explained away: it scores 20.5 on the Chowder rule, pays out roughly 99% of earnings, and Chevron is exiting its position. The combination of near-total earnings payout and a major sponsor's exit is the stated reason for concern, and the author explicitly leaves the 'why' on this name unresolved. No target or timeframe is given.