PSX - Phillips 66: Despite Uncertainties Dividend Growth Outlook Remains Very Strong
Summary
- After a multi-year hiatus, Phillips 66 restarted dividend growth in 2022, and this appears set to continue into 2023 and beyond.
- Due to the Russian invasion of Ukraine and the resulting never-before-seen refining margins, 2022 was a record-setting year.
- They are acquiring DCP Midstream in early 2023, thereby adding more stable financial performance into the mix that helps during years with weaker refining margins.
- Although their lack of guidance creates uncertainties about the extent of benefit their free cash flow will receive.
- Since they still have a very strong dividend growth outlook even without any additional financial contribution from DCP Midstream, I still believe that maintaining my buy rating is appropriate.
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Phillips 66: Despite Uncertainties, Dividend Growth Outlook Remains Very Strong