Editor's note: This article previously stated that Hess Midstream LP is a pass-through entity whose investors receive a Schedule K-1. Hess Midstream is taxed as a corporation, and holders of its Class A shares receive a Form 1099-DIV. The article has been corrected.

You may not know much about Hess Midstream LP (HESM -0.80%), but if you're a fan of dividends, it's worth getting to know -- because its dividend was yielding a whopping 7.8% as of the end of August.

Hess Midstream produces and processes natural gas primarily from the Bakken and Three Forks Shale regions in North Dakota. Known, in part, as a pipeline company, it serves Hess (a wholly owned subsidiary of Chevron) and third-party customers -- and its shareholders.

Its dividend is particularly impressive not only because of the size of the yield, but also because it has been increased quarterly for lots of quarters -- going back around nine years. Better still, these are not minor increases -- the quarterly dividend paid in mid-August was fully 7% higher than the year-earlier payout, and 56% higher than the dividend five years prior.

Image source: Getty Images.

That's not all -- Hess Midstream has also been buying back shares, which rewards shareholders by making each remaining share worth more. (Imagine cutting a pizza into six pieces instead of eight -- that's the effect of buying back and essentially retiring lots of shares.)

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NYSE: HESM

Hess Midstream

Premium Feature

Moneyball Superscore

71/100

Today's Change

(-0.80%) $-0.31

Current Price

$38.47

Key Data Points

Market Cap

$4.9BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$38.32 - $39.12

52wk Range

$31.63 - $41.44

Volume

1.8M

Avg Vol

1.1M

Gross Margin

63.69%

Dividend Yield

8.02%

The war with Iran has provided a tailwind to some energy companies -- with Chevron, for example, up 36% year-to-date (as of Aug. 31) and ExxonMobil up 33%. Hess Midstream is up 21%.

As you dig into Hess Midstream, keep in mind that despite the "LP" in its name, it isn't taxed like a traditional master limited partnership. Hess Midstream converted to an "Up-C" structure at the end of 2019, and the publicly traded entity is taxed as a corporation. So investors in its Class A shares are shareholders, not limited partners: you'll receive a Form 1099-DIV rather than a Schedule K-1 at tax time, and the shares can be held in a tax-deferred account like an IRA without the complications that come with owning MLP units.

If this hefty dividend yield is appealing to you, take a closer look at Hess Midstream.