Phillips 66 (PSX 0.01%) was spun out from ConocoPhillips several years ago, and has since become an outperforming stock. In this Motley Fool Live segment from "The High Energy Show," recorded on June 7, Fool.com contributor Jason Hall takes a closer look at this energy company.
Jason Hall: Something Tyler's talked about before is we have these trillions of dollars of existing assets that can be leveraged to generate renewable fuels, and to move renewable fuels. I think Phillips 66 is pretty well-positioned to be able to do that. They're involved in some battery start-ups since it's a battery manufacturing. Hydrogen is the thing that we've seen come out of refiners for a long time, so they have some expertise and they're continuing to look there. But this is a big one right here, is already started to transition, its refining infrastructure over to renewables. So Humber, this is in the UK. These facilities are oldest biodiesel refining facility, and they continue to lever it up. Again, they are using used cooking oil right now for this one. Rodeo, this is close to San Francisco up near the Bay Area. Massive capacity and they're really looking to make this one a model of what a full-scale refinery can look like generating renewable fuels.
I also want to talk a little bit about the economic model and the returns. Phillips 66 was spun out of ConocoPhillips back in 2011 or 2012, maybe late 2012. ConocoPhillips became the pure-play E&P company, and Phillips 66 was all the other integrated parts excluding that. As you can see, there has been a great record of growing the dividend. COVID happened and they said, well, we're just going to hold tight with a dividend and they've increased it twice since returning to dividend growth. Again, good dividend yield, you take that dividend growth and that dividend yield and you put it together and you end up with a stock that, since it was spun out, has handily outperformed. But again, this is the COVID period, a crash, and a non-bananas environment. This is a company in a business that has consistently been an outperforming stock, so I think it's a perfect fit for this basket.
