EPD vs HESM: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. EPD and HESM share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined EPD and HESM exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Enterprise Products Partners operates one of the most integrated midstream systems in North America, with tens of thousands of miles of pipelines plus storage, natural gas processing, NGL fractionation, and marine export terminals along the Gulf Coast. The bulk of its cash flow is fee-based, meaning it earns fees for moving and handling volumes rather than taking direct commodity price bets, which historically has produced more stable cash flow than producers. In the first quarter of 2026 the partnership reported record NGL fractionation volumes of about 1.9 million barrels per day and roughly 2.7 billion dollars of EBITDA, up about 10 percent year over year, helped by newly commissioned assets such as the Bahia NGL pipeline and the Neches River export terminal. Momentum continued into the second quarter: revenue reached about 18.3 billion dollars, up about 61 percent year over year as higher commodity prices passed through its marketing business, and net income was about 1.84 billion dollars, or 0.79 dollars per unit versus about 0.77 expected. Over the trailing twelve months EPD generated about 58.5 billion dollars of revenue, 6.2 billion dollars of net income and 8.9 billion dollars of operating cash flow.

Full EPD guide

Hess Midstream LP owns and operates midstream infrastructure in the Williston Basin (Bakken and Three Forks shale plays) in North Dakota, running three segments: gathering (oil, gas, and produced water pipelines), processing and storage (natural gas processing and NGL fractionation), and terminaling and export (crude and NGL loading and transport). It earns essentially all revenue from fixed, fee-based, long-term contracts, historically with Hess Corporation and now with Chevron following Chevron's July 2026 completion of its Hess acquisition. This structure insulates cash flow from short-term commodity-price swings, since HESM is paid for handling volumes rather than for the value of the barrels. Trailing revenue is about $1.61 billion and trailing net income about $375 million (as of October 2026); second-quarter 2026 revenue was ~$399 million and EPS of $0.75 beat the ~$0.66 estimate.

Full HESM guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• EPD drivers: A 27-year distribution-growth streak; Fee-based, volume-driven cash flow.
• HESM drivers: Fee-based, contracted cash flow; Return of capital, reset.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: EPD's volumes and some margins are still tied to commodity production and global energy demand, so a sustained downturn in oil, natural gas, or NGL activity could pressure cash flow. For HESM, hESM still carries significant concentration risk: Bakken volumes depend on Chevron's drilling activity, and Chevron's move from three rigs to two is expected to reduce volumes about 5% through 2027.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick EPD if you believe its drivers more; HESM if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the EPD and HESM guides.

EPD. EPD is typically held as an income holding rather than a high-growth one, so investors tend to weigh distribution coverage, leverage, and yield more than earnings multiples. At about 12.5 times trailing earnings and 10.8 times EBITDA with a 6.3 percent yield, units are priced for steady low-single-digit growth (consensus EPS of ~$3.07 for 2026 and ~$3.17 for 2027), and the mean analyst target of about $41 sits above the $36 unit price. Q3 2026 results are due October 29, with consensus near $0.73 per unit.

HESM. After the October 2026 sell-off, HESM trades at about 10.6 times trailing earnings and roughly 6 times trailing EBITDA, with a trailing yield near 10%, cheaper than before the Chevron deal was announced. Those trailing figures overstate future earnings power: preliminary 2027 adjusted EBITDA of about $900 million is well below the ~$1.23 billion trailing figure, and analysts' 2027 revenue estimate is about $1.45 billion. The market is pricing lower Bakken fees, a paused distribution and higher leverage against contracts that now run to 2045.

Headline figures (approximate, October 2026): EPD shows revenue (ttm to june 2026) ~$58.5 billion (Q2 2026 up ~61% YoY on pass-through prices), net income (ttm) ~$6.2 billion; Q2 2026 EPU $0.79 vs ~$0.77 est., p/e (trailing / forward) ~12.5x / ~11.4x, distribution yield ~6.3% (~$2.24 annualized per unit); HESM shows revenue (ttm) ~$1.61B, q2 2026 revenue ~$399M (-3.7% YoY), net income (ttm) ~$375M, preliminary 2027 adj. ebitda ~$900M.

EPD and HESM are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined EPD and HESM exposure against your real portfolio. It is not an investment adviser.