PSX - These High-Yield Stocks Are Going Green to Grow Their Dividends
Refining companies are at an interesting crossroads. Demand for refined products is strong these days as the economy gets back on its feet after hitting a speed bump during the early stages of the pandemic. This means the margins they're earning to refine oil into gasoline, diesel, and jet fuel are soaring, giving them gushing profits to pay big-time dividends.
However, instead of investing some of that windfall into expanding their oil refining capacity to make more money in the near term, many refining companies are starting to invest in facilities that produce renewable fuels. They believe this strategy will pay bigger dividends over the long term as the economy switches fuel sources, moving away from fossil fuels to cleaner alternatives.
Phillips 66 (NYSE: PSX) has been a great dividend stock since its inception a decade ago. The refining, midstream, and chemicals company has increased its dividend 11 times over the last 10 years, growing its payout at an 18% compound annual rate. It made its most recent increase in May, giving investors a 5% raise. That has helped push its dividend yield up to 4.3%
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These High-Yield Stocks Are Going Green to Grow Their Dividends