Income Investor looks at top dividend stocks. This week’s pick is Phillips 66 (PSX), an impressive income play showing steady growth and rising dividends. It’s worth a close look because this combination is rare, though it became more common in 2022’s booming energy sector.
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Headquartered in Houston, Phillips manufactures and distributes petrochemicals through four segments: refining, midstream, chemicals and marketing.
Rising energy prices have led to windfall profits for Phillips 66. Year-over-year earnings soared 103% while sales rose 55% in the third quarter, reported in early November.
Top Dividend Stock: Q4 Results Expected To Impress
Top dividend stock Phillips 66 is expected to post a 2022 profit of $19.41 per share, massively higher than the $5.70 reported last year and miles away from an 89-cent loss in 2020. Q4 EPS is estimated at $4.70 on revenue of $40.8 billion. Investors will find out if the petroleum producer hit the mark on Jan. 31 when Q4 results are released.
Strong results have supported bullish share buybacks and dividend increases. Phillips 66 announced an additional share buyback of $5 billion in November.
The dividend is currently 97 cents per share quarterly, equating to a 3.73% annual yield. That’s more than double the 1.6% yield of the S&P 500. The dividend has seen impressive growth, increasing every year since 2012. Growth has compounded at an 18% rate during that period.
Investors can expect payouts to continue as long as energy prices remain buoyant. Right now, Phillips 66 is looking to increase total distributions (buybacks & dividends) to $10- to $12 billion in 2024.
IBD’s Oil and Gas-Refining/Marketing industry group has outperformed, ranking 43rd out of 197 industries. Phillips 66 is currently second in the group, posting a strong 98 Composite Rating.
PSX shares recently reversed at 50-day moving average resistance as the dividend stock forms a 15-point flat-base consolidation. They will need to move above that barrier to reach the 113.63 buy point and enter new-high territory.
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Source: https://www.investors.com/research/the-income-investor/top-dividend-stock-phillips-66-races-away-on-growth-increasing-dividend/?src=A00220&yptr=yahoo