COMPARE · Reviewed July 2, 2026
HESM vs LPG
Verdict: Side-by-side breakdown using the Bull Rankings model. HESM scored 65.3, LPG scored 64.2 — HESM ahead by 1.0999999999999943.
HESM
Hess Midstream LP
65.3
$38.16
Score gap
1.0999999999999943
HESM leads
LPG
Dorian LPG Ltd.
64.2
$36.01
The companies
HESMHess Midstream LP
Why now
Oil & Gas Midstream · market cap $7.9b. 14% off the 52-week high of $44.14. 6 sell-side analysts rate this an Underperform with a mean 1-yr target of $36.83 (implying -3% upside).
Moat
Net margin 23% sits well above the S&P median (~11%) — suggests structural pricing advantage or cost discipline competitors can't quickly close. Free cash flow runs well ahead of reported net income — non-cash charges (depreciation, intangible amortization) are holding down GAAP earnings while cash generation stays strong.
Risk
Dividend payout 103% of earnings on a 8.0% yield — distribution coverage is thin; one earnings stumble could force a dividend cut. Hedge-book exposure — many commodity producers hedge forward production; if the hedge book is concentrated at prices well below spot, the upside the market expects is already locked away.
LPGDorian LPG Ltd.
Why now
Oil & Gas Midstream · market cap $1.5b. Down 25% from 52-week high of $48.12 — deep drawdown territory. Revenue growing +36% — in hypergrowth territory. PEG 0.22 — paying under fair value for the growth rate. 5 sell-side analysts publish a mean 1-yr target of $51.20 (implying +42% upside).
Moat
Net margin 40% is exceptional — pricing-power territory rare outside premium software, branded staples, and specialty pharma. ROE 17% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately. FCF converts 108% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.
Risk
Production-cost sensitivity — top-quartile cost producers generate cash through the cycle while marginal producers burn it; watch the cost-per-unit trend, not just headline revenue.
Base grades (each contributes ~14.3% of base composite)
| HESM | Component | LPG |
|---|---|---|
| C+70 | FCF | C65 |
| B80 | Rev | A95 |
| C65 | D/E | B80 |
| B+85 | P/E or P/S | A-90 |
| C+70 | PEG | A95 |
| Supplemental signals · feed the score, not on the row card | ||
| A95 | FCF Yield | A95 |
| C65 | ROE | B+85 |
| 76.6 | Base composite | 87.2 |
Adjustments (signed deltas applied on top of base)
HESM
analyst consensus weak (0% buy)-2
yield trap (yield 8.0%, payout 103%)-2
DCF cross-check (avg upside 190%)+2
ROE truncated (buyback-depleted equity)-1
Total-3
LPG
compounder synergy (FCF yield ≥5% + ROE ≥15% + D/E <1)+4
GARP sweet spot (PEG <1, positive FCF)+1
analyst consensus tilt buy (60%)+1
safe high yield (8.4% at 54% payout)+1
forward P/E richer (8 → 11)-1
DCF cross-check (avg upside 103%)+2
Total+8
DCF cross-check (per-share value vs. live price)
| HESM upside | Horizon | LPG upside |
|---|---|---|
| +159% | 1Y | +128% |
| +184% | 5Y | +105% |
| +227% | 10Y | +75% |
Verdict — model-derived comparison
Generating verdict… typically 5–10 seconds
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