NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that HES's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
- HES, with its decline in revenue, underperformed when compared the industry average of 12.1%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for HESS CORP is rather low; currently it is at 23.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.60% trails that of the industry average.
- Net operating cash flow has decreased to $988.00 million or 12.95% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Hess Corporation, together with its subsidiaries, operates as an integrated energy company. The company operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). The company has a P/E ratio of 11.5, equal to the average energy industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Hess has a market cap of $15.17 billion and is part of the
industry. Shares are down 21.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.