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Ranking 7 Refining Stocks Based on Their Dividend Yields

PART:
1 2 3 4 5 6 7 8
Part 5
Ranking 7 Refining Stocks Based on Their Dividend Yields PART 5 OF 8

Phillips 66’s Dividend Yield: Highest Market Cap, Premium Valuations

Phillips 66’s dividend yield

In the previous part, we analyzed the dividend yield of Valero Energy (VLO), which stands third in terms of current dividend yield among the seven downstream stocks compared in this series. In this part, we’ll look at the dividend yield of Phillips 66 (PSX).

Phillips 66 (PSX) ranks fourth on our the list of seven dividend yielding refining stocks. Phillips 66 (PSX) is an American downstream company with Refining, Chemicals, Midstream, and Marketing business segments. PSX’s market cap of ~$47 billion puts it in first place among the seven companies in our survey.

Phillips 66’s Dividend Yield: Highest Market Cap, Premium Valuations

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Phillips 66 has a current dividend yield of 3.1%. In 3Q17, PSX made a dividend payment of $0.70 per share. The dividend was announced on July 12, 2017, and was paid on September 1. 

PSX has paid dividends consistently in the past three years, and its dividend payments have risen during this period. In comparison, PSX made a dividend payment of $0.50 per share on September 2, 2014. Like PSX, VLO has also seen a rise in its dividend payments in the past three years.

Valuations

Phillips 66’s (PSX) forward PE (price-to-earnings) ratio rose from 10.7x in 2Q14 to its current level of 16.8x. Also, PSX’s current forward PE ratio trades above the average forward PE ratio of 16.0x of the six refining stocks.

Phillips 66 trades at a premium over its peer averages, which could be due to its diversified earnings model that is centered on growth even in a volatile refining environment. PSX is looking to increase the steady income from its Midstream and Marketing segments along with growing returns from its Refining segment. So, if the refining environment improves, it could lead to higher earnings for the company.

For more on PSX’s growth activities, please refer to How Phillips 66’s Capex Is Shaping Its Future Growth Path?

Move onto the next part to learn about Marathon Petroleum (MPC), which stands fifth in terms of current dividend yield in our survey.

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