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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Phillips 66 (NYSE:PSX), it is a dependable dividend payer with a a great history of performance, trading at a discount. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Phillips 66 here.
Good value with proven track record and pays a dividend
Over the past few years, PSX has demonstrated a proven ability to generate robust returns of 21% Not surprisingly, PSX outperformed its industry which returned 11%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. PSX's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of PSX's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the oil and gas industry, PSX is also trading below its peers, relative to earnings generated. This supports the theory that PSX is potentially underpriced.
PSX is considered one of the top dividend payers in the market, and it has also been able to maintain it at a level in which net income is able to cover dividend payments.
For Phillips 66, there are three pertinent aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for PSX’s future growth? Take a look at our free research report of analyst consensus for PSX’s outlook.
- Financial Health: Are PSX’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PSX? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.