Hess Midstream LP (HESM): Yield Attracts Income Investors
As the U.S. continues to be a global leader in oil and gas output, infrastructure like that provided by Hess Midstream remains essential.
Hess Midstream LP (HESM) is a master limited partnership that owns, operates, and develops midstream energy infrastructure in the Bakken shale region of North Dakota. The company’s core assets include oil and gas gathering systems, processing plants, and pipeline transportation infrastructure. Its revenue model is built on long-term, fee-based contracts with Hess Corporation, which help provide stable cash flows and predictable returns. Hess Midstream’s growth is largely tied to the volume of oil and gas production in the Bakken, and it benefits directly from increased drilling activity and efficient production by its parent company.
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The company has consistently expanded its processing capacity and pipeline reach, which allows it to move more volumes across its network. In recent quarters, HESM has shown solid earnings and continues to return capital to shareholders through regular distributions. One key advantage is its “no commodity price exposure” model, meaning its business is insulated from crude price swings. This gives it a unique level of stability, especially in volatile energy markets.
The current economic landscape adds both complexity and opportunity. While inflation is easing and interest rate hikes may be nearing a pause, capital remains expensive. This can challenge infrastructure expansion across the energy sector. However, strong domestic energy demand and higher U.S. production levels are tailwinds for companies like HESM that provide the infrastructure backbone. As long as drilling remains active in the Bakken, Hess Midstream is well-positioned to benefit.
Looking at the chart, HESM recently posted a confirmation bar with increasing volume, indicating renewed interest and a potential move higher. This pattern has pushed the stock into the momentum zone, where follow-through buying tends to accelerate. When technicals align with strong fundamentals like these, it often draws attention from both income-focused investors and momentum traders.
For those managing positions, a trailing stop can be a powerful risk management tool. A trailing stop rises with the stock, helping to capture gains while protecting from a reversal. When combined with the Fibonacci snap tool, investors can establish stops just below key retracement levels. This strategy gives trades room to breathe while defining risk clearly.
Hess Midstream has also focused on operational efficiency, reducing costs per barrel gathered and improving system utilization. This boosts margins without relying on market price movement. That kind of disciplined management creates confidence in long-term distribution sustainability.
Its unique contract structure ensures that even if volumes dip slightly, the company still meets minimum volume commitments from Hess Corporation. This contract model provides downside protection, which is valuable in uncertain macro environments. That predictability is a major reason why income investors favor HESM.
HESM’s yield is attractive, and its cash coverage ratios remain strong. Management has also guided for modest distribution growth, backed by increased throughput and higher system efficiency. That’s the kind of clarity income investors look for in midstream partnerships.
As the U.S. continues to be a global leader in oil and gas output, infrastructure like that provided by Hess Midstream remains essential. With limited exposure to commodity pricing and a steady stream of fee-based income, HESM offers a compelling mix of yield and stability.
For more information, visit Hess Midstream’s official website.
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