Phillips 66 (PSX) is considered a midstream and downstream oil and gas company. PSX is adjusting to the Global economy by divesting some of it non-core assets, and reinvesting in mid-stream sectors on the gas and oil industry. This vertical approach has enabled the company to increase its revenue from core operations. PSX decision to separate for Conoco in 2012 was a way to get rid of too many assets and allow for better growth. With the separation they were more capable to compete with industry giant Valero. PSX is worldwide company providing gasoline, diesel and aviation fuel using “marketer-owed” or “supplied outlets.” The company also uses the Jet brand name in their marketing in Austria, in Germany and the U.K. They have utilized …show more content…
The oil and gas industry is also threatened by the reserve limitations that are starting to affect the industry. As reserves are expanded the ability to find replacements is becoming increasingly difficult. PSX focus on research and development is very forward thinking. They were recently awarded a new patent that will aid in the production of bio-oil that will produce “upgraded fuel products.” PSX is also expanding its market in China; and have signed an export deal with Sinopec. Sinopec is a propane manufacturer that intends to use very large gas carriers (VLGC’s) through the newly widened Panama Canal by (2016). PSX profit/earnings ration continues to increase over the last four quarters. With the current P/E on the rise it would be advisable to purchase stock. Also, as of the current Z Score is 5.10. The company is currently in the safe zone, and over the past five years the lowest Z score was a 4.14. In comparison with the oil and gas industry, which has a Z score of 3.5. PSX is significantly out performing the