Elliott Management Applies Pressure With Phillips 66 Board Fight

Summary

• Phillips 66 has underperformed compared to peers, with chronic issues in its Refining Segment and large investments in underperforming global pet-chem plants.
• Earlier this month, activist investor Elliott Management nominated seven directors to PSX's board and is lobbying to spin-off PSX's Midstream Segment to unlock shareholder value.
• PSX's Midstream Segment has shown strong growth and is its most consistent well-performing segment, enabling robust dividend growth since going public.
• I maintain a Hold rating for PSX due to limited downside, the attractive 3.64% dividend yield, and potential for continued strong dividend growth.

Are blue-skies ahead for Phillips 66?

StockPhotoAstur

Most followers of Phillips 66 (NYSE:PSX) already know that the company has become a target of corporate activist Elliott Management. Earlier this month, Seeking Alpha reported that Elliott had nominated seven directors for seats on PSX's board - continuing its

Analyst’s Disclosure:I/we have a beneficial long position in the shares of COP, CVX, PSX, XOM either through stock ownership, options, or other derivatives. 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.

I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.