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Phillips 66 Hovering Near All-Time Highs, Shares Yield ~2.7%

publication date: Mar 20, 2024
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Image: Phillips 66 continues to be very shareholder friendly returning cash in the form of share repurchases and dividends. 

Though crack spreads can be quite volatile at times, there’s a lot to like about Phillips 66. The company is targeting 2025 mid-cycle adjusted EBITDA of $14 billion, up from $10 billion in 2022. Cost savings should remain ongoing, with its target calling for a total of $1.4 billion in savings, implying the company has $200 million more in savings to go. We like its investment-grade (A3/BBB+) balance sheet and target for 2025 mid-cycle adjusted operating cash flow of $10+ billion, up from $7 billion in 2022, with expectations that it will return more than half of operating cash flow to shareholders. Phillips 66 is a quality income idea for investors seeking exposure to the energy space.


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