IBD’s Income Investor highlights top dividend stocks. Phillips 66 (PSX) is in focus today, with hot growth and an impressive dividend.
Headquartered in Houston, Phillips 66 is a diversified energy company operating through four segments: midstream, refineries, chemicals and marketing.
The Oil Refiners/Marketing group is one of IBD’s top-performing subsectors in 2022. It currently ranks 9th out of 197 industry groups. Phillips 66 ranks second in the group, with a strong 98 Composite Rating.
For income-seeking investors, Phillips 66 pays out an impressive 4.29% dividend yield, well above the S&P 500’s 1.7% average.
The energy giant has made this quarterly payout a top priority, increasing it every year since 2012.
Dividend Stocks: Energy Market Earnings Soar
Phillips 66 has been growing at an incredible pace, in addition to its impressive yield. Growth comes as energy prices have soared amid tight global supply.
Strong results have also improved the balance sheet. The company reduced debt by $1.5 billion in Q2 and resumed share repurchases that were halted in March of 2020.
Profits are forecast to nearly triple to $16.10 in 2022, after 2021 earnings of $5.70 per share. In addition, analysts forecast a profit of $4.68 per share when Phillips 66 reports third-quarter earnings on Nov. 1.
However, the global macro environment could impact profits in coming quarters. They may be forced to choose between the benefits of tight energy markets and a recession that slows demand.
Fortunately, world markets have already priced-in some slowing of energy demand.
This dividend stock has performed well in recent weeks, rallying above its 200-day moving average.
It’s now consolidating in a potential double-bottom, with a 94.85 buy point.
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