Updated 3/13/25
Phillips 66 has been around for over a decade as a standalone company, but its roots go much deeper in the energy world. Spun off from ConocoPhillips back in 2012, it’s grown into a major player in refining, midstream, and chemicals. It’s not as flashy as some tech stocks or growth names, but for dividend investors, PSX continues to be one of those companies worth keeping on the radar.
Its mix of steady income, solid infrastructure, and commitment to rewarding shareholders makes it a fixture in many long-term portfolios. But with the energy space facing plenty of ups and downs lately, it’s worth revisiting where PSX stands today—especially if you rely on those dividend checks rolling in.
Recent Events
Let’s start with the obvious—PSX has had a bit of a rough patch. The stock has fallen about 20% from its 52-week high, now trading in the $125 range. That drop isn’t out of the blue. We’ve seen earnings stumble and margins shrink, all while oil prices have bounced around unpredictably.
Most recently, the company’s net income has dropped off significantly, sitting at just over $2 billion for the last year. The more eye-catching number? A 99% drop in year-over-year quarterly earnings. That’s the kind of stat that makes you double-check the math.
Revenue also slid by 12%, showing just how tight things have gotten for refiners. Still, through all this, PSX hasn’t touched the dividend. In early March, the company went ahead and paid its regular quarterly payout, sticking to its long-term pattern of returning capital to shareholders—even when times get tough.
Key Dividend Metrics
💵 Forward Dividend Yield: 3.67%
📆 Dividend Payment Date: March 5, 2025
🧮 Current Annual Payout: $4.60 per share
📊 Payout Ratio: 90.18%
📈 5-Year Average Yield: 4.25%
🔁 Years of Consecutive Payments Since Spin-Off: 12
📉 Trailing Yield: 3.59%
Dividend Overview
At just under 3.7%, the dividend yield on PSX offers a decent cushion for income-focused investors. It’s not shooting the lights out, but it’s comfortably above what you’d get from most broad market indexes or savings accounts these days.
That said, the payout ratio has crept up to just over 90%, which leaves very little margin for error. When the business is humming, this doesn’t raise too many eyebrows. But in a tougher earnings environment, a payout that size starts to look a little risky. For now, the company is still covering it—but barely.
Dividend Growth and Safety
Since becoming its own company, Phillips 66 has made a point of rewarding shareholders. Dividend increases were once almost routine, especially when margins were strong and cash was flowing. Lately, though, growth has slowed. Management chose to hold the line this time around instead of raising the payout.
It’s understandable. Free cash flow over the last year came in at just $445 million. That’s a drop in the bucket compared to where it was a few years ago. There’s still enough cash coming in from operations—over $4 billion—to manage debt and dividends for now, but it does put the company in a more cautious spot.
A big swing in refining margins or any unexpected capital needs could change the story quickly. That’s the balance here: a commitment to the dividend on one hand, and tighter room to maneuver on the other.
Chart Analysis
Wyckoff Stage Assessment
Looking at the PSX chart, the current structure suggests the stock is working its way through the late accumulation phase, following a prolonged markdown that bottomed out in late December. Prices hit their lowest point just above the 108 mark and have been carving out a base since then.
From January onward, we can see a series of higher lows forming, which is often the first visual signal of demand quietly returning. The support around 110 has held firmly multiple times, and we’ve started to see shallower pullbacks. This is typical behavior in the later stages of accumulation where smart money begins positioning.
We haven’t quite broken into a full markup phase yet. The 200-day moving average is still sloping downward, and the price is currently trading slightly below it, though showing signs of pressing upward. The 50-day moving average has started to flatten, hinting that short-term momentum is shifting, but it hasn’t yet crossed above the 200-day—a move that would confirm a more structural change in trend.
Volume and Price Behavior
Volume tells a subtle but important part of the story here. We saw a large spike in volume during the mid-December washout, which aligns with capitulation behavior—the type of panic selling that often marks a final markdown. Since then, volume has been relatively stable with a few upward thrusts in January and February, particularly on green days. These volume bursts on up days suggest institutional buyers are showing up at key support levels.
In late February, volume spiked again during a push to the 128 area, though the move didn’t hold. What followed was a controlled pullback on lower volume—often a sign of a healthy consolidation rather than a reversal.
Moving Averages and Price Structure
The price remains trapped between the 50-day and 200-day moving averages, creating a zone of indecision. Until price can reclaim the 200-day with conviction and hold above it, the larger trend remains in question. That said, the fact that it’s spending more time near the upper end of its range is a positive development.
The 50-day moving average is starting to level off and could curl upward in the coming weeks. If it crosses over the 200-day, that would mark a golden cross, often interpreted as a bullish shift in trend structure.
Relative Strength Index (RSI)
The RSI has moved up significantly since the December lows, but it’s currently hovering near the midline, indicating the stock is neither overbought nor oversold. This neutral stance suggests the market is waiting for more conviction—either from a fundamental catalyst or a broader energy sector move.
Notably, the RSI didn’t break below 30 on the recent minor pullback, which implies selling pressure is diminishing. This is another subtle signal pointing toward accumulation rather than continued distribution.
Latest 5 Candles and Price Action
The last five daily candles show a tug-of-war developing between bulls and bears. Here’s the breakdown:
- Candle 1 (five days ago): Strong green candle with a small wick to the top. Buying pressure dominated the session, closing near the high.
- Candle 2: Doji-like, indicating indecision. Small body with equal wicks on both ends—market took a breather after the prior day’s strength.
- Candle 3: Modest red candle with a lower wick, showing some dip-buying into intraday weakness.
- Candle 4: Slight bullish candle with a long lower wick, signaling rejection of lower prices.
- Candle 5 (most recent): Closed at 123.98 with a modest gain and light volume. Not explosive, but firm and orderly—a quiet show of support just under the 50-day moving average.
Taken together, this cluster of candles paints a picture of consolidation with a slight bullish bias. Sellers are testing, but buyers are stepping in at dips without panic.
Analyst Ratings
📈 Phillips 66 (PSX) has recently seen a shift in sentiment from several analysts, reflecting changing expectations around its forward performance and sector positioning.
🟢 In January, one major firm moved PSX from a neutral stance to an outperform rating, highlighting stronger-than-expected operational efficiency and progress in strategic cost-cutting. That upgrade came with a revised price target of $143, suggesting potential upside based on improved refining margins and a leaner cost base.
🟡 Meanwhile, in February, another analyst group maintained their buy rating but nudged the price target slightly lower—from $130 to $128. The adjustment wasn’t a reflection of weakening fundamentals but rather a recalibration due to softer refining spreads and near-term margin compression.
🔵 A different research house also tweaked its target downward, shifting from $136 to $132, while still backing the stock with a buy rating. They cited lingering macro uncertainties and reduced throughput volumes, though they noted the company’s long-term position remains intact.
📊 Despite the mixed moves, the average 12-month price target across analyst coverage is hovering around $139. That leaves a modest gap between current trading levels and what analysts collectively view as fair value.
💬 Much of this activity has stemmed from PSX’s recent earnings performance, which underwhelmed versus expectations. A per-share loss of $0.15 in the latest quarter caught many off guard and spurred a reassessment of near-term profitability. Analysts have also noted the elevated payout ratio and narrower net margins as reasons for caution.
📉 Still, there’s no mass downgrade wave here—just nuanced shifts in expectations. Most analysts remain cautiously optimistic, pointing to the company’s scale, dividend reliability, and upside if refining conditions stabilize.
Earning Report Summary
Phillips 66’s latest earnings report wasn’t exactly a home run, but it did reveal a few things worth paying attention to. For the fourth quarter of 2024, the company reported net earnings of just $8 million—or basically breakeven when you break it down per share. On an adjusted basis, they actually posted a loss of $0.15 per share, which caught more than a few people by surprise.
One of the bigger drags came from a hefty depreciation charge tied to their Los Angeles Refinery. That single move knocked around $230 million off the books before taxes, and it definitely made its presence felt on the bottom line.
But while the headline numbers were light, the company didn’t pull back on its shareholder returns. They returned over $1.1 billion through a mix of dividends and share buybacks during the quarter, which shows they’re still prioritizing capital return even in a choppier quarter.
Operationally, they did have a few wins. The Midstream segment posted record volumes when it came to NGL fractionation and LPG exports. That part of the business continues to quietly grow stronger. Their Refining segment also logged its best-ever clean product yield, so while margins were tighter, efficiency didn’t take a back seat.
Stepping back and looking at the full year, Phillips 66 earned just over $2 billion—or $4.99 per share—and about $6.15 per share on an adjusted basis. Operating cash flow hit $4.2 billion, and they returned more than $5 billion to shareholders across the year. They also managed to squeeze out $1.5 billion in cost savings through business transformation efforts and added another $500 million in synergy benefits after integrating DCP Midstream.
Looking forward, the company’s setting its sights on cleaning up its balance sheet. They’ve outlined a plan to bring total debt down to around $17 billion by 2027 and are sticking with their goal of returning more than half of operating cash flow back to shareholders. So even if the most recent quarter was soft, they’re clearly focused on the longer-term game.
Financial Health and Stability
Phillips 66 isn’t sinking, but the numbers do show some weight on the balance sheet. The company is carrying over $21 billion in debt, and with a debt-to-equity ratio around 75%, it’s clear leverage is part of the story.
Cash on hand totals about $1.7 billion, and the current ratio—just a bit above 1—suggests they’re handling short-term obligations, but not exactly with a wide buffer.
On the performance side, the return on equity is still in decent shape at just above 7%, but return on assets and margins have taken a hit. These are the kinds of stats that make it clear the company isn’t firing on all cylinders right now. Still, for a cyclical business like this, that’s not entirely unexpected.
Valuation and Stock Performance
Valuation is a mixed bag. With a forward P/E around 20 and a trailing P/E north of 25, Phillips 66 is trading richer than it has historically. Some of that is because earnings have pulled back, inflating the ratio. But it also reflects how investors still see this as a long-term income name rather than a near-term growth story.
Enterprise value to EBITDA has climbed as well, now sitting at 11.6. Price to book, at around 1.87, is well off the lows but not screaming bargain either.
From a price movement standpoint, the stock is clearly in a downtrend. Shares are trading below both the 50-day and 200-day moving averages. That tends to reflect more caution than optimism from investors. Still, volume levels remain stable, showing that plenty of people are holding, not running.
Risks and Considerations
As with any energy name, there are a few things worth keeping on the radar.
First off, refining margins. These can swing wildly based on everything from global crude prices to seasonal demand. When margins are strong, PSX can be a cash machine. When they shrink, profits vanish fast.
Second, that high payout ratio. It’s not an immediate issue, but it does limit flexibility. If things get worse before they get better, the company might have to make some tough calls.
Third, the debt load. While it’s not unusual for companies in this space to carry leverage, it becomes more noticeable when cash flow is tight and interest rates are higher.
And finally, this is a cyclical business. Investors have to be ready for the ride. This isn’t a bond proxy or a steady utility stock—it’s going to have swings.
Final Thoughts
Phillips 66 is one of those companies that has built trust with dividend investors over time. It pays reliably, runs a diverse business, and generally keeps shareholders in mind when making decisions. Even now, as profits dip and the market gets jittery, the company hasn’t blinked on the dividend.
That said, the current setup isn’t without its challenges. The payout is high, cash flow is thin, and the broader environment for refiners remains uncertain. It’s the kind of stock that rewards patience but demands attention. You don’t want to set it and forget it.
For income seekers, PSX continues to be a compelling name in the energy space. Just know it’s going through a phase where margin for error is slim—and that dividend, while steady for now, is walking a tighter rope than it has in years past.