Phillips 66 Stands Firm as Activist Investor Group Calls for Changes

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Phillips 66 ($NYSE:PSX) is a prominent energy company that is based in Bellaire, Texas. They have a diverse business portfolio that includes refining, midstream, chemicals and marketing and specialties. Recently, an activist investor group has called for changes to the company’s board of directors.

However, Phillips 66 has chosen to stand firm and endorsed the current board. The investor group has suggested replacing four of the company’s board members, as well as nominating four new directors. They have argued that the existing board is not taking the necessary steps to maximize shareholder value. The investor group also believes that these changes could lead to increased stockholder returns and bring in fresh perspectives on how to manage the company. Phillips 66 has acknowledged the proposal from the activist investor group, but has decided to back the current board. They believe that the board has the expertise and experience to guide the company through these uncharted waters. Furthermore, they have pointed out that the company has been successful in its recent pursuits and is well-positioned for future growth. Ultimately, Phillips 66 is standing firm in its decision to endorse the current board of directors. They believe that the board’s experience and expertise will continue to lead them in a positive direction. While the investor group’s proposal may bring potential value, Phillips 66 is confident in their ability to grow their business without these changes.

Share Price

On Tuesday, PHILLIPS 66 stock opened at $128.6 and closed at $127.7, a decrease of 0.6% from its prior closing price of 128.4. Engaged Capital has specifically called for the appointment of two new independent directors to serve on the board, who have “deep experience” in corporate governance and the energy sector. In response to the announcement, Phillips 66 released a statement affirming its commitment to increase shareholder value and advance the company’s strategic objectives.

They noted that they take seriously all feedback from shareholders and are committed to acting in the best interests of all investors. The company also stated that they will evaluate the recommendations of Engaged Capital as part of their normal governance process, and they remain confident that their current board is well-equipped to drive value for all stakeholders. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Phillips 66. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Phillips 66. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Phillips 66. More…

Key Ratios Snapshot

Some of the financial key ratios for Phillips 66 are shown below. More…

Analysis

At GoodWhale, we have undertaken an analysis of the fundamentals of PHILLIPS 66. According to our Star Chart, the company is strong in terms of dividends, and medium in asset, growth and profitability. Our health score for the company is 9/10, indicating its strong ability to sustain future operations in times of crisis. Based on our assessment, PHILLIPS 66 is classified as a ‘rhino’, which we define as a company that has achieved moderate revenue or earnings growth. We believe that investors seeking a steady dividend income may be interested in such companies, as their cash flows tend to be relatively stable. Moreover, due to the company’s strong debt and cash flow profile, it may be attractive to investors seeking a secure long-term investment. More…

Peers

Phillips 66 is an American multinational energy company headquartered in Houston, Texas. It was founded in 1917 and is engaged in the refining, marketing, and transportation of petroleum products, chemicals, and other petrochemical products. The company has a market capitalization of $46.61 billion as of February 2021. Phillips 66 is one of the largest refiners in the United States with a refining capacity of 2.2 million barrels per day. The company operates in three segments: Refining, Midstream, and Chemicals. The Refining segment engages in the refining of crude oil and other feedstocks into transportation fuels, such as gasoline, diesel fuel, aviation fuel, and heavy fuel oils, as well as other refined products, such as petrochemicals and lubricants. The Midstream segment provides transportation, storage, and marketing services for crude oil, natural gas liquids (NGLs), and natural gas. The Chemicals segment manufactures and markets chemicals and plastics.

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Summary

Phillips 66 is the subject of an investor group’s call for changes. The investor group, which owns a substantial percentage of the company, has suggested that Phillips 66 should adopt strategies to improve its financial performance. They are urging the company to focus on cost-cutting measures, increase its returns on capital, and reduce its debt leverage.

Additionally, the investor group has proposed that Phillips 66 should take steps to increase shareholder dividend payments and explore potential merger and acquisition opportunities. The investor group has stated that it believes these changes could improve the company’s financial situation over the long term. Phillips 66 remains committed to delivering value to its shareholders and is currently reviewing the investor group’s suggestions.