Stock of the Day

September 21, 2020

Phillips 66 (PSX)

$206.96
+$5.64 (+2.8%)
Market Cap: $80.72B

About Phillips 66

Phillips 66 operates as an energy manufacturing and logistics company in the United States, the United Kingdom, Germany, and internationally. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels. This segment also manufactures and markets specialty products, such as base oils and lubricants. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.

Phillips 66 Bull Case

Here are some ways that investors could benefit from investing in Phillips 66:

  • The company has shown a strong quarterly revenue growth of nearly 7% year-over-year, indicating robust operational performance.
  • Phillips 66 recently announced a quarterly dividend of $1.27 per share, translating to an annualized dividend of $5.08, which offers a yield of approximately 2.6%—an attractive return for income-focused investors.
  • Equities analysts have a consensus rating of "Moderate Buy" for Phillips 66, with an average target price around $194.89, suggesting potential upside for investors.
  • The company has a solid return on equity of 10.98%, reflecting effective management and profitability relative to shareholder equity.
  • Recent upgrades from multiple analysts, including a "strong-buy" rating, indicate positive market sentiment and confidence in the company's future performance.

Phillips 66 Bear Case

Investors should be bearish about investing in Phillips 66 for these reasons:

  • The net margin of 2.99% suggests that while the company is generating revenue, its profitability may be limited compared to industry peers.
  • Despite positive growth, the stock price may be subject to volatility due to fluctuations in the energy market, which can impact investor sentiment.
  • With a dividend payout ratio of 50.05%, there is a significant portion of earnings being distributed to shareholders, which could limit funds available for reinvestment in growth opportunities.
  • Analysts have mixed ratings, with some assigning a "hold" rating, indicating uncertainty about the stock's short-term performance.
  • Recent geopolitical events and market conditions could pose risks to the energy sector, potentially affecting Phillips 66's operations and stock performance.
← Previous Stock of the DayNext Stock of the Day →

Recent News