Hess Corp Stock Buy Recommendation Reiterated (HES)

Editor's Note: 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.

NEW YORK ( TheStreet) -- Hess (NYSE: HES) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • Powered by its strong earnings growth of 117.50% and other important driving factors, this stock has surged by 33.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HES should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HESS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, HESS CORP increased its bottom line by earning $5.95 versus $5.01 in the prior year. This year, the market expects an improvement in earnings ($6.17 versus $5.95).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 134.1% when compared to the same quarter one year prior, rising from $545.00 million to $1,276.00 million.
  • The gross profit margin for HESS CORP is rather high; currently it is at 62.20%. It has increased significantly from the same period last year. Along with this, the net profit margin of 36.81% significantly outperformed against the industry average.
  • HES, with its very weak revenue results, has greatly underperformed against the industry average of 6.7%. Since the same quarter one year prior, revenues plummeted by 64.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Hess Corporation, together with its subsidiaries, operates as an independent energy company worldwide. It operates in two segments, Exploration and Production (E&P), and Marketing and Refining (M&R). Hess has a market cap of $23.8 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 9.00, below the S&P 500 P/E ratio of 18.00. Shares are up 30.9% year to date as of the close of trading on Monday.

You can view the full Hess Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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