Phillips 66 (PSX) Rewards Investors With a Dividend Hike

Phillips 66 PSX recently received approval from the board of directors to increase its quarterly dividend.

The new dividend of $1.15 per share represents an increase of 10% from the prior-quarter payout of $1.05. The hiked dividend of the diversified energy company will likely be paid on Jun 3 to shareholders of record as of the close of business on May 20.

This reflects Phillips 66's stable and growing business. Being one of the most diversified refiners, the company is putting more emphasis on midstream, renewables and chemicals operations, thereby stabilizing its earnings potential.

The solid business model is thus aiding the company to further strengthen its focus on returning capital to shareholders. Phillips 66 has witnessed a 16% compound annual growth rate in dividends since its formation in 2012. In fact, the leading and diversified refiner has a target of returning $13 billion to $15 billion to investors via both dividend and share repurchases from July 2022 to 2024.

Currently, Phillips 66 carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include SunocoLP SUN, Shell plc SHEL and Murphy USA Inc. MUSA. While Sunoco and Murphy sport a Zacks Rank #1 (Strong Buy), Shell carries a Zacks Rank #2 (Buy).

Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts. 

Shell also has the ambitious target of becoming a net-zero emissions energy player by 2050 or earlier. By 2030, the integrated energy company plans to lower absolute emissions by 50%.

Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.

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