Hess lifts dividend 50%, tweaks shareholder return language in new investor deck

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Hess (NYSE:HES) released an updated investor deck after the close Tuesday, bumping the dividend, tweaking shareholder return language and announcing repayment of a term loan:

• The dividend was increased 50% to 37.5c per share, representing a 1.5% forward yield.
• shareholder return language was tweaked, with management committing to return "up to 75% of annual adjusted free cash flow" through dividends and buybacks; previously, the Company had committed to return a "majority" of free cash flow.
• The company also announced they repaid an outstanding $500m term loan in February, and maintain more than $1b in cash.
• Hess's (HES) Company forecast calls for $2.8-3.1b of free cash flow in 2026, assuming $65 Brent; if management returns 75% of that cash, investors would receive a 9.8% shareholder return, in 2026.

The 2026 shareholder return is in-line with peer 2022 shareholder returns, although Hess (HES) is using a more conservative oil price in 2026 than peers are using in 2022. The Company operates some of the highest quality assets in the world; however, a sub 10% shareholder return promise by 2026 is unlikely drive outperformance in the near term.