Hess Corp. (HES)

StockSpreadsheet (< 20) Submitted: 7/26/07 2:15 AM : Start Price: $59.46 HES Score: 35.45

"Hess Corporation, together with its subsidiaries, engages in the exploration, development, production, purchase, transportation, and sale of crude oil and natural gas."

Average annual sales growth of 22% over last 4 years. Average annual EPS growth of 49% over last 3 years, though EPS fell in 1Q07. The pretax profit margin has been rising the past 3 years. The EPS/book value has also risen in the past 3 years. The debt-to-equity ratio has been falling the past 3 years, though it rose slightly so far this year. The current P/E ratio is significantly above its 5 year trailing average and is in fact higher than it has been at any time in the past 5 years. This is bad. The 3 year trailing average PEG ratio is a very low 0.25. The current payout ratio is 8%, which is very low, so the dividend, currently yielding 0.6%, should be secure and there is room to raise it, if management so desires, (though they have not done so in the past 5 years, so there is not much hope of them doing so in the near future). I think this stock could be worth $130.00 in five years, or about double its current price of $64.63. Add in the small dividend and I think this stock is a weak buy at this price.

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