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Phillips 66 (PSX) Unveils $2B Capital Spending Program for 2023
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Phillips 66 (PSX - Free Report) announced a capital spending program of $2 billion for 2023, higher than its prior year’s forecast.
The company plans to spend $1.1 billion on growth projects, 50% of which will be allocated to low-carbon opportunities. Sustaining capital will be $865 million.
Economies across the world are gradually transitioning to cleaner energy sources. Hence, fossil fuel players have been consistently boosting investments in renewables and low-carbon fuels due to the urgency to act on climate change on multiple fronts.
Phillips 66 will invest $1.1 billion in refining, including $389 million for reliability, safety and environmental projects. $729 million will be reserved as refining growth capital, including the conversion of its San Francisco refinery into one of the world’s largest renewable fuel facilities. The conversion will reduce emissions and produce low-carbon transportation fuel at the facility.
The company will invest $639 million in midstream business, including $310 million for growth projects and $329 million for sustainable projects. The growth capital will be allocated to improve the company’s integrated NGL value chain from wellhead to market.
The capital program also supports Phillips 66’s commitment to return $10-$12 billion to shareholders between the second half of 2022 and the end of 2024 through dividends and share repurchases.
Price Performance
Shares of the company have outperformed the industry in the past three months. The stock has gained 13.8% compared with the industry’s 8.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Phillips 66 currently carries a Zack Rank #2 (Buy).
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s fiscal third-quarter 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
DCP Midstream, LP is a leading energy infrastructure firm. DCP’s third-quarter adjusted earnings of $1.50 per unit beat the Zacks Consensus Estimate of $1.05.
DCP Midstream is expected to see an earnings surge of 181% in 2022. The company currently has a Zacks Style Score of A for Growth and Value. DCP generated an excess free cash flow of $52 million in the third quarter.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to see an earnings surge of 128.5% in 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.
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Phillips 66 (PSX) Unveils $2B Capital Spending Program for 2023
Phillips 66 (PSX - Free Report) announced a capital spending program of $2 billion for 2023, higher than its prior year’s forecast.
The company plans to spend $1.1 billion on growth projects, 50% of which will be allocated to low-carbon opportunities. Sustaining capital will be $865 million.
Economies across the world are gradually transitioning to cleaner energy sources. Hence, fossil fuel players have been consistently boosting investments in renewables and low-carbon fuels due to the urgency to act on climate change on multiple fronts.
Phillips 66 will invest $1.1 billion in refining, including $389 million for reliability, safety and environmental projects. $729 million will be reserved as refining growth capital, including the conversion of its San Francisco refinery into one of the world’s largest renewable fuel facilities. The conversion will reduce emissions and produce low-carbon transportation fuel at the facility.
The company will invest $639 million in midstream business, including $310 million for growth projects and $329 million for sustainable projects. The growth capital will be allocated to improve the company’s integrated NGL value chain from wellhead to market.
The capital program also supports Phillips 66’s commitment to return $10-$12 billion to shareholders between the second half of 2022 and the end of 2024 through dividends and share repurchases.
Price Performance
Shares of the company have outperformed the industry in the past three months. The stock has gained 13.8% compared with the industry’s 8.3% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Phillips 66 currently carries a Zack Rank #2 (Buy).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s fiscal third-quarter 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 277.8% in 2022. HP boasts a strong balance sheet, carrying $542.3 million in long-term debt. The company’s debt-to-capitalization stands at just 16.6% compared with many of its peers that are hugely burdened with debts.
DCP Midstream, LP is a leading energy infrastructure firm. DCP’s third-quarter adjusted earnings of $1.50 per unit beat the Zacks Consensus Estimate of $1.05.
DCP Midstream is expected to see an earnings surge of 181% in 2022. The company currently has a Zacks Style Score of A for Growth and Value. DCP generated an excess free cash flow of $52 million in the third quarter.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to see an earnings surge of 128.5% in 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.