Hess Corporation cash flow and capital allocation update#
Hess Corporation's free cash flow swung from -$166.00 million in 2023 to +$654.00 million in 2024 while capital spending rose to $4.95 billion, putting Hess Corporation cash flow and capital allocation squarely in focus for investors and analysts.
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The cash-flow reversal was driven by a notable jump in operating cash generation to $5.60 billion in 2024, even as capex expanded; these cash dynamics have reshaped near-term capital allocation choices (source: Monexa AI.
At the same time, HES has reported a string of quarterly earnings beats and maintained a quarterly dividend program of $0.50 per share (four payments totaling $2.00 annually), sending mixed signals about balance-sheet reinvestment versus shareholder distribution (source: Monexa AI.
Key developments & market reaction#
Hess has posted consecutive beats in recent quarters — the company recorded EPS beats in July, October, January and April earnings releases — reflecting underlying operational leverage to commodity prices and project throughput (source: Monexa AI.
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Capital-allocation moves are straightforward: dividends continued at $2.00 per share TTM with a reported payout ratio of 26.90%, while share repurchases were effectively paused in 2024 (no repurchases recorded) after significant buybacks in earlier years (source: Monexa AI.
Market metrics place the equity at $148.97 per share with a market capitalization of $46.07B and a trailing P/E around 20.66x, while enterprise-value multiples are moderate (source: Monexa AI. These figures frame how investors are pricing growth, cash returns and capital intensity into the shares.
Financial performance: income statement, cash flow and balance sheet#
Revenue expanded to $12.90B in FY 2024 from $10.51B in FY 2023 — a +22.69% top-line increase — accompanied by gross-profit margins near 78.9% and an operating-income improvement to $4.78B (source: Monexa AI.
Profitability and scale: EBITDA rose to $7.25B in 2024 (EBITDA margin ~56.24%) and reported net income on the income statement was $2.77B in FY 2024, a +100.36% increase versus FY 2023 (source: Monexa AI.
Balance-sheet and liquidity: year-end cash stood at $1.17B, total assets at $26.55B, total debt about $9.46B and net debt reported at $8.29B (source: Monexa AI. Key leverage metrics show net-debt/EBITDA ≈ 1.24x and a current ratio near 1.08x (source: Monexa AI.
Note on conflicting items in the dataset: the Monexa AI feed lists net income = $2.77B under the income statement for FY 2024 but shows $3.15B under the cash-flow table for the same fiscal year. For cash-based analyses (operating cash, free cash flow) we prioritize the cash-flow statement figures; for margin and P&L ratios we rely on the income-statement net income. Both figures are reported in the provided data and warrant reconciliation in the primary filing (source: Monexa AI.
FY financial snapshot (select items)#
| Fiscal Year | Revenue | Operating Income | Net Income (IS) | EBITDA | Free Cash Flow | CapEx (PPE) | Net Debt |
|---|---|---|---|---|---|---|---|
| 2024 | $12.90B | $4.78B | $2.77B | $7.25B | $654MM | $4.95B | $8.29B |
| 2023 | $10.51B | $2.90B | $1.38B | $5.00B | -$166MM | $4.11B | $7.91B |
| 2022 | $11.32B | $5.57B | $2.10B | $5.74B | $1.22B | $2.73B | $6.66B |
Source: Monexa AI (income statement, cash flow, balance-sheet cells as indicated).
Why did Hess's free cash flow swing in 2024?#
Hess's free cash flow swung from -$166.00 million to +$654.00 million because operating cash generation rose to $5.60 billion, and improvements in net income and working-capital dynamics partially offset expanded capex of $4.95 billion (source: Monexa AI.
Digging deeper, operating cash provided increased materially year-over-year (Monexa growth data shows operating-cash growth of +42.06%), while depreciation and non-cash charges remained a meaningful add-back to cash from operations (source: Monexa AI.
At the same time, capex jumped sharply versus 2022 levels, reflecting project spend and sustaining investment; that rise in capital intensity explains why FCF, although positive in 2024, remains modest relative to operating cash (source: Monexa AI.
Analyst estimates, valuation and capital-allocation signals#
Forward multiple dynamics show dispersion by year: forward P/E is reported at 27.82x for 2025, falling toward 11.46x by 2027 in consensus projections; TTM EV/EBITDA sits near 8.22x (source: Monexa AI. These forward multiples embed near-term normalization of earnings and longer-term EPS growth expectations.
Analyst models included in the data show revenue/EPS trajectories for 2025–2029 (consensus-average estimates):
| Year | Estimated Revenue | Estimated EPS |
|---|---|---|
| 2025 | $11.38B | $6.11 |
| 2026 | $13.23B | $8.34 |
| 2027 | $15.68B | $13.11 |
| 2028 | $18.80B | $16.13 |
| 2029 | $18.03B | $17.79 |
Source: Monexa AI (analyst estimate aggregates).
The capital-allocation footprint is telling: dividends are steady at $2.00 per share TTM (yield ≈ 1.34%) with a payout ratio of 26.90%, while share repurchases were nil in 2024 — indicating management is prioritizing reinvestment and dividend stability over buybacks in the recent cycle (source: Monexa AI.
Key takeaways and strategic implications#
- Operating cash recovery: Operating cash rose to $5.60B in 2024, enabling a positive free cash-flow outcome despite heavy capex (source: Monexa AI.
- Capex-led profile: Capital spending of $4.95B in 2024 compresses distributable cash but supports medium-term production and throughput (source: Monexa AI.
- Dividend continuity, buyback pause: Dividends of $2.00 per share were maintained while repurchases fell to zero in 2024, signaling prioritization of reinvestment + base dividend (source: Monexa AI.
- Leverage profile manageable: Net debt of $8.29B with net-debt/EBITDA ≈ 1.24x leaves headroom compared with sector heavyweights (source: Monexa AI.
Strategically, the data show a company balancing growth capex and shareholder returns: higher capex points to investment in production and midstream capacity, while steady dividends preserve a baseline return to shareholders. Management's pause on buybacks reduces near-term optionality for accelerated capital returns but preserves flexibility if commodity conditions deteriorate (source: Monexa AI.
Investors should monitor three near-term signals in the filings and releases: operating-cash conversion versus capex; any re-introduction or scaling of buybacks; and reconciliation notes in filings that resolve the net-income discrepancy between income-statement and cash-flow line items (source: Monexa AI.
Key publication note: All financial figures and estimates referenced above are drawn from the Monexa AI data feed and the company's reported financial statements as aggregated by Monexa AI (source: Monexa AI.