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The energy sector is ripe with interesting dividend opportunities. Still, experienced investors know that high-yield pipeline stocks are among the best places to be for dependable midstream energy income.

Due to perceived safety and familiarity, income-hungry market participants perusing the midstream often embrace large-cap names, including the three E's: Enbridge (ENB 1.73%), Energy Transfer, and Enterprise Products Partners. Focusing on the $123.2 billion Enbridge for a moment, investors' adulation for that pipeline giant is understandable. It's a large-cap stock with a dividend yield of 4.9%.

These pipeline stocks sport impressive dividend yields. Image source: Getty Images.

Those are appealing numbers, ones that imply a level of comfort craved by many dividend investors. However, market participants willing to go further down the midstream market capitalization spectrum can be rewarded with both significant payouts and upside potential.

The unheralded duo of Hess Midstream (HESM 0.35%) and Western Midstream (WES +1.39%) confirm as much.

All hail Hess A couple of things explain Hess Midstream's overlooked status. First, the company has a market value of $8.3 billion, making it a mid-cap stock, and the investing public consistently overlooks that segment. Second, while many midstream players focus on the Permian Basin or the Gulf Coast region, Hess does not.

Rather, this pipeline operator controls gas, oil, and water assets in the Bakken and Three Forks shale regions of North Dakota. Geography doesn't alter the fact that this energy stock carries an impressive dividend yield of 7.7%. Oh yeah, it's a payout grower, too. In January, Hess Midstream announced a distribution increase while noting that its free-cash-flow growth through 2028 should support dividend growth of at least 5% annually.

As its name implies, Hess is, in fact, a midstream company, but investors who aren't yet familiar with this name should note this operator doesn't compare on an apples-to-apples basis with Enbridge. Hess is fully vertically integrated within one basin and is highly dependent on its relationship with Chevron.

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In the first quarter, Hess derived 96% of its revenue from Chevron contracts. On the surface, that sounds risky, but some of the risk is defrayed on multiple fronts. First, Hess isn't taking on commodity price risk. Second, while there is some volume risk here, the company has sturdy minimum-volume commitments with Chevron, which provide clarity for investors. Investors don't seem to mind the Chevron relationship, as Hess Midstream's shares are up 16.2% this year.

Winning with Western Midstream From an income perspective, Western Midstream is another energy stock that deserves more attention. This $18.8 billion company delivers the dividend goods, as evidenced by its 8.1% yield. More importantly, the Permian Basin operator has a five-year streak of dividend increases to its credit.

Western Midstream forecast 2026 distributable cash flow of $1.85 billion to $2.05 billion, and first-quarter operating and maintenance expenses declined by 7%, implying this payout is on solid ground. The potential long-term upside for both the dividend and the stock is supported by the operator's enviable position in the Delaware Basin. Not the state of Delaware, but one of the most lucrative portions of the broader Permian Basin.

In the first quarter, the company produced a record amount of oil and natural gas liquids (NGLs) in the Delaware Basin. Western paid $1.6 billion for Brazos in a deal aimed at fortifying the buyer's position in the Delaware Basin. That deal, which closed last month, could add as much as $100 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) this year while transforming Western into a must-have partner for Permian drillers.

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Investors looking for another reason to consider this stock may want to examine the $1.5 billion acquisition of Aris Water Solutions, completed last October. That deal positions Western as one of the leading water providers in the Permian Basin, potentially giving it a durable competitive advantage over rivals that focus more on energy storage and transportation.

Hess Midstream remains a "Strong Buy," offering an 8.5% yield and at least 15% upside, despite recent underperformance and Bakken drilling headwinds. HESM's long-term contract with Chevron through 2033, with annual CPI-linked fee escalators, secures stable cash flow and mitigates near-term oil price and volume risks. Free cash flow yield stands at ~13%, supported by reduced capex, growing third-party revenues, and robust EBITDA margins of 83%.

Hess Midstream Partners (HESM) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.

Hess Midstream LP (HESM) remains a Buy, demonstrating strong cash flow, resilient financials, and a sustainable, competitive yield despite macro uncertainty. HESM pivots from heavy CAPEX to capital returns, targeting 5% distribution growth through 2028, with recent buybacks and targeting leverage reduction below 2.5x Adj. EBITDA. Guidance calls for Adj. FCF to reach $850–900 million, growing 10% annually, supporting an 8.4% yield and 76% payout ratio by 2026.

HOUSTON--(BUSINESS WIRE)--Hess Midstream LP Schedules Earnings Release Conference Call.

Posted by Defense World Staff on Apr 9th, 2026

Shares of Hess Midstream Partners LP (NYSE:HESM – Get Free Report) have been assigned an average recommendation of “Hold” from the nine analysts that are presently covering the stock, MarketBeat reports. Eight investment analysts have rated the stock with a hold rating and one has assigned a buy rating to the company. The average 12-month target price among brokers that have issued a report on the stock in the last year is $40.7143.

A number of equities research analysts recently commented on HESM shares. Wells Fargo & Company increased their target price on shares of Hess Midstream Partners from $39.00 to $40.00 and gave the company an “equal weight” rating in a research report on Friday, March 13th. Weiss Ratings raised shares of Hess Midstream Partners from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Monday, March 2nd. Raymond James Financial cut shares of Hess Midstream Partners from an “outperform” rating to a “market perform” rating in a research report on Monday, January 5th. Finally, Zacks Research raised shares of Hess Midstream Partners from a “strong sell” rating to a “hold” rating in a research report on Monday, March 2nd.

View Our Latest Research Report on Hess Midstream Partners

Hess Midstream Partners Price Performance Shares of HESM opened at $39.62 on Thursday. The company has a 50 day moving average price of $38.17 and a 200-day moving average price of $35.42. Hess Midstream Partners has a fifty-two week low of $31.63 and a fifty-two week high of $44.14. The stock has a market capitalization of $8.23 billion, a PE ratio of 13.85 and a beta of 0.58. The company has a debt-to-equity ratio of 8.54, a quick ratio of 0.85 and a current ratio of 0.85.

Hess Midstream Partners (NYSE:HESM – Get Free Report) last announced its quarterly earnings results on Monday, February 2nd. The company reported $0.72 earnings per share for the quarter, hitting the consensus estimate of $0.72. Hess Midstream Partners had a net margin of 21.77% and a return on equity of 74.89%. The firm had revenue of $374.50 million during the quarter, compared to analysts’ expectations of $419.16 million. During the same quarter in the prior year, the company earned $0.68 EPS. The company’s revenue was up 2.1% compared to the same quarter last year. Equities analysts predict that Hess Midstream Partners will post 2.5 earnings per share for the current fiscal year.

Hess Midstream Partners Increases Dividend The company also recently announced a quarterly dividend, which was paid on Friday, February 13th. Investors of record on Thursday, February 5th were given a dividend of $0.7641 per share. The ex-dividend date of this dividend was Thursday, February 5th. This is a positive change from Hess Midstream Partners’s previous quarterly dividend of $0.75. This represents a $3.06 dividend on an annualized basis and a yield of 7.7%. Hess Midstream Partners’s dividend payout ratio is currently 106.99%.

Institutional Investors Weigh In On Hess Midstream Partners A number of hedge funds and other institutional investors have recently bought and sold shares of the company. Geneos Wealth Management Inc. raised its holdings in shares of Hess Midstream Partners by 14.3% in the second quarter. Geneos Wealth Management Inc. now owns 2,400 shares of the company’s stock worth $92,000 after buying an additional 300 shares during the last quarter. Kestra Private Wealth Services LLC raised its holdings in shares of Hess Midstream Partners by 1.3% in the fourth quarter. Kestra Private Wealth Services LLC now owns 25,766 shares of the company’s stock worth $889,000 after buying an additional 330 shares during the last quarter. Farther Finance Advisors LLC raised its holdings in shares of Hess Midstream Partners by 14.1% in the third quarter. Farther Finance Advisors LLC now owns 2,696 shares of the company’s stock worth $93,000 after buying an additional 333 shares during the last quarter. Investment Management Corp VA ADV raised its holdings in shares of Hess Midstream Partners by 3.0% in the fourth quarter. Investment Management Corp VA ADV now owns 12,519 shares of the company’s stock worth $432,000 after buying an additional 362 shares during the last quarter. Finally, Cetera Investment Advisers raised its holdings in shares of Hess Midstream Partners by 0.8% in the fourth quarter. Cetera Investment Advisers now owns 44,931 shares of the company’s stock worth $1,550,000 after buying an additional 378 shares during the last quarter. Hedge funds and other institutional investors own 98.97% of the company’s stock.

Hess Midstream Partners Company Profile (Get Free Report)

Hess Midstream Partners LP, formerly traded on the New York Stock Exchange under the ticker HESM, is a midstream energy partnership that owns, operates and develops crude oil, natural gas and produced water infrastructure in the Williston Basin. The company’s assets include crude oil gathering and transportation systems, saltwater disposal wells, natural gas processing and fractionation plants, and associated pipeline and storage facilities. Its integrated network is designed to support upstream production by providing gathering, processing, storage and marketing services for hydrocarbons and produced water.

Headquartered in Houston, Texas, Hess Midstream Partners primarily serves producers operating in North Dakota and Montana’s Bakken Shale region.

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HOUSTON--(BUSINESS WIRE)---- $HESM--HESS MIDSTREAM LP ANNOUNCES DISTRIBUTION PER SHARE LEVEL INCREASE.

HOUSTON--(BUSINESS WIRE)---- $HESM--Hess Midstream LP (NYSE: HESM) (“Hess Midstream” or the “Company”) today reported first quarter 2026 net income of $157.7 million compared with net income of $161.4 million for the first quarter of 2025. After deduction for noncontrolling interests, net income attributable to Hess Midstream was $87.6 million, or $0.68 basic earnings per Class A share, compared with $0.65 basic earnings per Class A share in the first quarter of 2025. Hess Midstream generated Adjusted EB.

Although the revenue and EPS for Hess Midstream Partners (HESM) give a sense of how its business performed in the quarter ended March 2026, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.

Hess Midstream earns a Buy rating for its high yield, robust distribution growth, and Chevron-backed, fee-based contracts extending through 2033. HESM's distribution has grown for eight consecutive years, with a 5-year CAGR of 11.29%, and management targets at least 5% annual growth through 2028. Q1 2026 results showed a 2.6% rise in adjusted EBITDA, a 24.3% increase in adjusted free cash flow, and continued share/unit buybacks.