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Hess Corporation (HES)

Company Dividend Discount ModelIndustry: Oil & Gas Exploration & ProductionSector: Energy

Valuation Snapshot

Stable Growth$170.23 - $454.43$260.80
Multi-Stage$116.66 - $127.44$121.95
Blended Fair Value$191.38
Current Price$159.73
Upside19.81%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.88%6.69%1.881.751.511.011.001.021.121.181.130.93
YoY Growth--7.42%15.91%49.52%0.65%-2.22%-8.41%-4.96%3.71%21.95%-5.28%
Dividend Yield--1.18%1.13%1.14%0.94%1.42%3.08%1.84%2.33%2.35%1.77%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,227.00
(-) Cash Dividends Paid (M)599.00
(=) Cash Retained (M)1,628.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)445.40278.38167.03
Cash Retained (M)1,628.001,628.001,628.00
(-) Cash Required (M)-445.40-278.38-167.03
(=) Excess Retained (M)1,182.601,349.631,460.98
(/) Shares Outstanding (M)308.43308.43308.43
(=) Excess Retained per Share3.834.384.74
LTM Dividend per Share1.941.941.94
(+) Excess Retained per Share3.834.384.74
(=) Adjusted Dividend5.786.326.68
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$170.23$260.80$454.43
Upside / Downside6.57%63.28%184.50%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,227.002,371.762,525.922,690.102,864.963,051.183,142.72
Payout Ratio26.90%39.52%52.14%64.76%77.38%90.00%92.50%
Projected Dividends (M)599.00937.261,316.971,742.082,216.892,746.062,907.01

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)851.18859.24867.31
Year 2 PV (M)1,086.151,106.841,127.73
Year 3 PV (M)1,304.791,342.251,380.41
Year 4 PV (M)1,507.911,565.901,625.55
Year 5 PV (M)1,696.291,778.221,863.29
PV of Terminal Value (M)29,534.6830,961.2132,442.35
Equity Value (M)35,981.0037,613.6739,306.63
Shares Outstanding (M)308.43308.43308.43
Fair Value$116.66$121.95$127.44
Upside / Downside-26.96%-23.65%-20.21%

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