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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Hess Corporation (XNYS:HES) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HES
Name:
HESS CORPORATION (XNYS:HES)
Sector:
- 702000.00K
Industry:
Oil & Gas E&P
CEO:
Mr. John Hess
Total Employees:
1,545
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 11.85% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HESS CORPORATION(HES) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS E&P INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
120.91
One Month Price Target:
$121.96
Six Month Price Target :
$127.23
Likely Price in One Year's Time:
Ticker:
$133.54
Likely Trading Range Today Under (Normal Volatility)
$120.35
Price Upper limit ($) :
$121.88
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$111.83
This week:
$100.62
This month :
$80.32
Other Primary facts
Market Cap:
36.98B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
309.61M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.32%
-33.67%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$162.98
$143.39
$78.84
$98.43
Medium risk (<10%) entry points
Buy Call
Sell Call
$137.02
Buy Put:
Sell Put:
$132.83
$104.75
$108.99
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HES
Sharpe Ratio:
4.30%
Comparison:
HES, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -6.52% lower than the industry
& ratio is 88.47% higher than the market/S&P 500 average
Average Returns/Yield of
HES
Daily returns:
0.17%
Weekly returns:
0.85%
Monthly returns:
3.39%
Yearly returns:
61.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is -33.81% below industry average
Classification:
HES, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.86
Statistical test of Returns:
HES has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.74%
Weekly Volatility:
8.36%
Monthly Volatility:
16.71%
Yearly Volatility:
57.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.49%
Volatility in last five trading days has been -6.71% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.51%
Weekly VaR:
-16.78%
Monthly VaR:
-33.57%
How Much Can the price of
HES
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$87.37
This translates to price declining to:
$18.14
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HES is a 136.91% riskier investment compared to the market/S&P 500 & is 102.96% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -29.99% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HES
Beta in relation to market/S&P 500--1.55
Expected beta in 1 year's time:
0.937
Expected beta in 3 year's time:
1.325
Unlevered (debt free) Beta:
0.852
Beta in relation to Nasdaq (XNAS):
0.817
Beta in relation to all global stocks::
0.902
Beta Comparison & Analysis
Beta of competitors/peers::
1.984
Beta is -21.64% lower than peers
Average Industry Beta:
2.012
Beta is -22.74% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.33%
Sustainable growth rate is -85.64% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.269
Alpha is -39.63% below industry average alpha yield
Alpha is 1709% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HES
Equity cost of capital:
0.138
Equity cost of capital is -18.51% below industry mean WACC
Unlevered (without debt) cost of capital:
7.56%
Before-tax cost of debt:
5.65%
After-tax cost of debt:
4.46%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.46%
WACC is -30.54% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$25.48
Revenue growth rate per share of (3Y):
5.31
Annual revenue growth rate is -84.33% below industry average
EPS:
$2.33
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.76
Balance sheet equity growth per share: -15.18%
Equity growth rate per share is -112.16% lower than the industry
Debt per share
$27.49
EBITDA per share
$10.83
Valuation Analysis Today of
HES
P/E Ratio:
25.64
P/E Ratio of Competitors/Peers:
19.78
P/E ratio is 29.65% higher than main peers & is -39.11% lower than the industry
Stock price/value with industry average P/E ratio: $98.12
HES is 23.22% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $24.54
Present value of the expected future dividends only: $14.92
P/S (Price to Sales ratio):
4.75
Price to sales ratio is -3.60% below the industry mean
P/B (Price to book value ratio):
5.31
Price to free cash flow: 158.11
-
Net income growth rate (3Y):
-286.52%
Net income growth rate is -140.31% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 16.44%
Dividend yeild: 1.03%
Previous Dividend: $0.38
Previous adjusted dividend: $0.38
Previous Dividend: $1.25
Expected next dividend best case: $0.42
Expected next dividend worst case: $0.33
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: 5.00%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.38
2021-12-14--$0.25
2021-06-14--$0.25
2022-03-11--$0.38
2021-09-14--$0.25
2021-03-16--$0.25
Dividend growth rate is -87.92% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
134.91%
Net debt to equity ratio:
114.98%
Debt to assets ratio:
42.98%
Net debt to assets ratio:
36.64%
Debt-to-asset ratio is -19.30% below industry average
Ability to repay debt:
Interest coverage ratio:
6.89
Interest coverage ratio is -13.16% less than industry average
Looking forward:
Debt growth rate:
9.12%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 5.62%
Analysis of Key Statistics
Correlation of price movement with the market:
0.536
Statistical significance of correlation:
HES has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.394
Stock price is 35.96% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.394
Correlation of price movement with Nasdaq (^IXIC):
0.04
Covariance of price movement with the market:
0.087
Kurtosis
12.547
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.398
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HES
Gross Profit Margin Ratio:
247%
Operating Profit Margin Ratio:
28.14%
Operating profit margin is -2145.73% lower than the industry
Net Profit Margin Ratio:
247%
Effective Tax Rate:
38.89%
Effective tax rate is 96.50% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.48%
Return on equity (ROE) is 34.82% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.66%
Return on assets (ROA) is 59.06% higher than the industry
Financial Leverage:
1.8x
Current Ratio:
1.42
Current ratio is -29.00% below industry average
Cash Conversion Cycle (days):
-20.6
Cash conversion cycle is -129.06% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
4.56%
In-depth Efficiency Analysis
Revenue generated per employee:
5.1M
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
2.2M
Each employee generates -11% less EBITDA than industry average revenue per employee
Profit generated per employee:
468.6K
Each employee generates 12% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 454.4K
Each employee generates 393% more free cash flow than industry average revenue per employee
Assets/Capital per employee
10.7M
Each employee generates 393% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HES
Ecopetrol SA (XNYS:EC)
Cenovus Energy Inc. (XNYS:CVE)
ONEOK, INC. (XNYS:OKE)
HALLIBURTON COMPANY (XNYS:HAL)
BAKER HUGHES COMPANY (XNAS:BKR)
OCCIDENTAL PETROLEUM CORPORATION (XNYS:OXY)
MPLX COM UNT (XNYS:MPLX)
DEVON ENERGY CORPORATION (XNYS:DVN)
VALERO ENERGY CORPORATION (XNYS:VLO)
Current Analyst Ratings
Strong buy�17%
Buy�21%
Hold�46%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.89B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.94B
4.95B
-
356.00M
2.55B
2.20B
172.00M
2.73B
-
487.00M
1.47B
3.35B
2.22B
724.00M
1.73B
674.00M
724.00M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
38.00M
Stock Based Compensation :
33.00M
Change in Working Capital :
- 1108000.00K
Accounts Receivables:
- 642000.00K
Other Working Capital:
- 128000.00K
Other Non-Cash Items:
376.00M
Net Cash Provided by Operating Activities:
- 156000.00K
Investments in PP&E:
- 546000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.37B
-
1.37B
1.52B
243.00M
129.00M
3.27B
14.97B
360.00M
-
-
65.00M
1.14B
16.53B
-
19.80B
312.00M
113.00M
129.00M
-
1.88B
2.30B
8.51B
1.52B
10.45B
-
12.75B
311.00M
680.00M
- 766000.0K
-
March 31, 2022 at 6:00:00 AM
5.67B
6.31B
19.06B
-
8.62B
7.3B
-
24.00M
- 522000.00K
- 507000.00K
-
-
- 119000.00K
- 39000.00K
- 665000.00K
-
- 1343000.00K
1.37B
2.71B
- 156000.00K
- 546000.00K
- 702000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
HES
2023
2024
2025
2026
2027
$109.92
$121.40
$134.09
$148.10
$163.57