PSX - Phillips 66 Is The Best Refinery Play

• Indiscriminate selling in the energy sector has brought the once fairly valued names like PSX to being materially undervalued.
• PSX has a network of refining and midstream assets that are near impossible to replace. Environmental regulations make it practically impossible to replicate the assets PSX has.
• In addition, its refining segment will benefit going forward because of all the refinery capacity rationalization that's happening right now (higher cost refineries permanently shutting down).
• PSX also has a great track record of returning capital back to shareholders. It has reduced shares outstanding by ~33% since 2012 all the while paying out $26 billion in dividends total.
• At trough cycle multiple of 11x FCF and a sustainable dividend yield of ~7%, we see PSX as a great buy at today's price.

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