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Phillips 66 Announces Share Repurchase Program Worth $3B

Zacks

Midstream energy player Phillips 66 PSX has received consent for a new share repurchase program of $3 billion from its board of directors. Since the third quarter of 2012, the company’s total authorization for share repurchases has increased to $12 billion.

Phillips 66’s board of directors has also declared a regular quarterly dividend of 70 cents per common stock. The dividend is payable on Dec 1, 2017 to its shareholders of record as of the close of business on Nov 17, 2017.

These announcements are in sync with the company’s strategy to enhance shareholder value. Phillips 66 has increased quarterly dividend rate seven times. Since 2012, it has returned over $15 billion to its shareholders in the form of dividends, share repurchases and share exchanges. Phillips 66 has repurchased and exchanged over 20% of outstanding shares since its formation.

These actions increase the positivity that currently surrounds Phillips 66’s stock price. The company’s shares have been touching new highs. Phillips 66 is believed to have an association with the biggest North American travel center operator, Pilot Flying J, wherein Warren Buffet's Berkshire Hathatway Inc BRK.A has a stake of 38.6%. Berkshire Hathatway aims to have the majority ownership by 2023 in Pilot Flying-J.

ConocoPhillips COP has divested 50% of its stake in the CFJ Properties, which included Flying J truck stops to Pilot Travel Centers in 2010 for $626 million. During that time, the sales agreement comprised long-term supply contract agreements with Flying-J. However, as per sources, Phillips 66 still has long-term supply agreements with Flying-J. Phillips 66’s brand name along with the old ConocoPhillips signs is still seen at some of the Flying-J Travel Centers across the country.

Moreover, the company is likely to carry on with its upward trajectory as Berkshire holds considerable stakes in both companies and the supply agreements are expected to continue and expand.

Shares of the company have returned 13.3% compared with the industry’s increase of 9.6% over the last three months.



Zacks Rank & Key Picks

Currently, Phillips 66 carries a Zacks Rank #3 (Hold). Another better-ranked player in the energy sector is First Solar Inc FSLR, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

First Solar designs, based in Tempe, AZ, manufactures and sells solar electric power modules using a proprietary thin-film semiconductor technology. The company delivered an average positive earnings surprise of 524.24% over the last four quarters.

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