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Why Hold Strategy is Apt for Phillips 66 (PSX) Stock Now
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Phillips 66 (PSX - Free Report) has gained 46.1% in the past six months, outpacing the industry’s 20.3% 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 roughly 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. In July 2012, the company got authorization for $25 billion of share buyback, and since then, the energy major has repurchased shares worth $16.9 billion. The remaining program will continue and has no expiration date.
Risks
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
Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , Weatherford International plc (WFRD - Free Report) and Transportadora de Gas del Sur SA (TGS - Free Report) . While Murphy USA sports a Zacks Rank #1 (Strong Buy), Weatherford International and Transportadora de Gas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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. Over the past 30 days, the stock has witnessed upward earnings estimate revisions for this year.
Weatherfordis a key energy player and is engaged in offering exclusive drilling technologies that will maximize clients’ reservoir exposure. Weatherford is also involved in well construction and completion activities in an efficient manner.
Transportadora’s midstream asset portfolio has the most extensive natural gas pipeline network in Latin America. It generates stable fee-based revenues since its pipeline assets transport more than 60% of the gas consumed in Argentina.
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Why Hold Strategy is Apt for Phillips 66 (PSX) Stock Now
Phillips 66 (PSX - Free Report) has gained 46.1% in the past six months, outpacing the industry’s 20.3% 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 roughly 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. In July 2012, the company got authorization for $25 billion of share buyback, and since then, the energy major has repurchased shares worth $16.9 billion. The remaining program will continue and has no expiration date.
Risks
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
Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , Weatherford International plc (WFRD - Free Report) and Transportadora de Gas del Sur SA (TGS - Free Report) . While Murphy USA sports a Zacks Rank #1 (Strong Buy), Weatherford International and Transportadora de Gas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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. Over the past 30 days, the stock has witnessed upward earnings estimate revisions for this year.
Weatherfordis a key energy player and is engaged in offering exclusive drilling technologies that will maximize clients’ reservoir exposure. Weatherford is also involved in well construction and completion activities in an efficient manner.
Transportadora’s midstream asset portfolio has the most extensive natural gas pipeline network in Latin America. It generates stable fee-based revenues since its pipeline assets transport more than 60% of the gas consumed in Argentina.