Phillips 66's Recovering Financial Performance Could Lead To Sizable Dividend Growth

Jan. 24, 2022 7:25 AM ETPhillips 66 (PSX) StockPSX9 Comments
Valuentum
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Summary

  • We view Phillips 66's income growth upside potential quite favorably as its free cash flows should swell higher in 2022, aided by plans to keep its capital expenditures contained.
  • The top end of our fair value estimate range sits at $99 per share of Phillips 66, derived through our discounted free cash flow analysis process.
  • Phillips 66's financial performance staged an impressive recovery during the first three quarters of 2021, and we expect that recovery will continue in earnest going forward.

Phillips 66 gas station sign

StockPhotoAstur/iStock Editorial via Getty Images

By Valuentum Analysts

Phillips 66 (NYSE:PSX) is benefiting immensely from the ongoing recovery in the global energy complex as the world economy rebounds from the worst of the coronavirus ('COVID-19') pandemic. In our view, Phillips 66 should be

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Callum Turcan does not own shares in any of the securities mentioned above. Ratings and data as of January 20. Chevron Corporation (CVX) is included in Valuentum's simulated Best Ideas Newsletter portfolio, simulated Dividend Growth Newsletter portfolio, and simulated High Yield Dividend Newsletter portfolio. For updates, please visit us at www.valuentum.com. This article is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither Valuentum nor any of its affiliates own any securities mentioned in this article. Contact Valuentum for more information about its editorial policies.

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