Phillips 66 (PSX Quick QuotePSX - Free Report) is a diversified energy company. For 2025, the stock has witnessed two upward earnings estimate revisions over the past seven days.

What's Favoring PSX Stock?

PSX boasts a diversified business model, with substantial involvement in refining midstream, chemicals and marketing & specialties. Across its operations, Phillips 66 maintains a strong presence in terms of safety, profitability, scale and competitive advantages.

The company is prioritizing segments such as midstream, renewables and chemicals, enhancing the stability of its business model. With a U.S. pipeline network spanning 72,000 miles, Phillips 66 anticipates that nearly 80% of its midstream contracts will be fee-based, indicating a resilient business model with minimal susceptibility to fluctuations in commodity prices.

Phillips 66, currently carrying a Zacks Rank #3 (Hold), strongly focuses on returning capital to shareholders. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

The company has distributed $43 billion to shareholders via dividends and share repurchases since the 2022 spin-off, reflecting a strong preference for returning capital to shareholders.

Risks to PSX’s Business

The company has been investing significantly in refining upgrades and midstream infrastructure. Although the investment will likely yield rewards in the long run, it will put pressure on short-term cash flows.

Also, Phillips 66’s refining business is exposed to extreme volatility in commodity prices since the end products are made with raw crude oil. Rising input costs hurt the company’s refining business.

Some other companies with refining businesses that are likely to be exposed to volatility in oil prices are Marathon Petroleum Corp. (MPC Quick QuoteMPC - Free Report) , Valero Energy Corporation (VLO Quick QuoteVLO - Free Report) , and Exxon Mobil Corporation (XOM Quick QuoteXOM - Free Report) . 

Marathon Petroleum, with its extensive refining operations, manages the largest refining system in the United States. Although in 2025, MPC is likely to see an earnings decline of 24%, it is expected to rebound in 2026 with earnings growth of 66%.

Valero Energy boasts a combined daily throughput capacity of roughly 3.2 million barrels, with its 15 refineries across the United States, Canada, and the U.K. Although in 2025, VLO is likely to see an earnings decline of 8.3%, it is expected to rebound in 2026 with earnings growth of 43%.

ExxonMobil also has a strong footing in the global refining business, with roughly 5 million barrels per day of distillation capacity across its 21 refineries. ExxonMobil is strongly committed to returning capital to shareholders. Having increased its dividend payout for 42 consecutive years, XOM has established itself as a reliable income source for long-term investors