Phillips 66
Phillips 66 Fundamental Analysis
Phillips 66 (PSX) shows moderate financial fundamentals with a PE ratio of 14.29, profit margin of 3.32%, and ROE of 16.14%. The company generates $132.4B in annual revenue with weak year-over-year growth of -2.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze PSX's fundamental strength across five key dimensions:
Efficiency Score
WeakPSX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentPSX trades at attractive valuation levels.
Growth Score
WeakPSX faces weak or negative growth trends.
Financial Health Score
ExcellentPSX maintains a strong and stable balance sheet.
Profitability Score
ModeratePSX maintains healthy but balanced margins.
Key Financial Metrics
Is PSX Expensive or Cheap?
P/E Ratio
PSX trades at 14.29 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PSX's PEG of 0.07 indicates potential undervaluation.
Price to Book
The market values Phillips 66 at 2.34 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.41 times EBITDA. This is generally considered low.
How Well Does PSX Make Money?
Net Profit Margin
For every $100 in sales, Phillips 66 keeps $3.32 as profit after all expenses.
Operating Margin
Core operations generate 2.66 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.14 in profit for every $100 of shareholder equity.
ROA
Phillips 66 generates $5.78 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Phillips 66 generates limited operating cash flow of $4.96B, signaling weaker underlying cash strength.
Free Cash Flow
Phillips 66 produces free cash flow of $4.28B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $10.62 in free cash annually.
FCF Yield
PSX converts 6.80% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.29
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.34
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.47
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.81
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.23
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How PSX Stacks Against Its Sector Peers
| Metric | PSX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.29 | 20.19 | Better (Cheaper) |
| ROE | 16.14% | 1019.00% | Weak |
| Net Margin | 3.32% | -44017.00% (disorted) | Weak |
| Debt/Equity | 0.81 | -0.65 (disorted) | Distorted |
| Current Ratio | 1.23 | 4.60 | Neutral |
| ROA | 5.78% | -11655350.00% (disorted) | Weak |
PSX outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Phillips 66's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
43.09%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
-26.07%
Industry Style: Cyclical, Value, Commodity
DecliningFCF CAGR
-6.36%
Industry Style: Cyclical, Value, Commodity
Declining