Why Retain Strategy is Apt for Phillips 66 (PSX) Stock Now

Phillips 66 PSX has surged 59.3% in the past year compared with the industry’s 18.4% improvement. 

What's Favoring the Stock?

PSX has a diversified business model, with a significant presence in businesses related to refining midstream, chemicals and marketing & specialties. In each of its operations, Phillips 66 has a solid footprint pertaining to safety, profitability, size and competitive strengths.

It is focusing more on businesses like midstream, renewables and chemicals, which makes the business model more stable. Having 72,000 miles of U.S. pipeline network, the company expects nearly 80% of its midstream contracts to be fee-based, signifying a stable business model with low sensitivity to commodity price fluctuations.

Phillips 66, carrying a Zacks Rank #3 (Hold), has a strong focus on returning capital to shareholders. Last year, the energy major returned more than 50% of its operating cashflows to investors, employing share repurchases and dividend payments.


Phillips 66’s refining business is exposed to extreme volatility in commodity prices since the end products are made with raw crude oil. Rising input costs hurt the company’s refining business. 

Stocks to Consider

Some better-ranked energy companies are Sunoco LP SUN, Energy Transfer LP ET and Murphy USA Inc. MUSA. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.   

Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts. 

With more than 125,000 miles of pipeline and associated energy assets, Energy Transfer will generate stable fee-based revenues. The partnership’s pipeline network spans all the key oil and natural gas resources across the United States.

Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

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Sunoco LP (SUN) : Free Stock Analysis Report

Murphy USA Inc. (MUSA) : Free Stock Analysis Report

Phillips 66 (PSX) : Free Stock Analysis Report

Energy Transfer LP (ET) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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