This Oil Stock Has a Formula That Should Keep Rewarding Shareholders Over the Long Term

This Oil Stock Has a Formula That Should Keep Rewarding Shareholders Over the Long Term

Phillips 66 (NYSE: PSX) has been a very shareholder-friendly company since it separated from oil giant ConocoPhillips (NYSE: COP) in 2012. For starters, it has increased its dividend seven times and by a 30% compound annual growth rate over that time frame, which is why it pays an above-average current yield of 2.8%. On top of that, the refining and logistics giant has repurchased roughly $9 billion in stock, which has reduced shares outstanding by more than 20%. Those cash returns have helped drive a more than 250% total return for shareholders since its separation from ConocoPhillips, which is more than double the total return of the S&P 500.

That outperformance appears poised to continue given Phillips 66's future plans, where it expects to return a significant portion of its cash flow to investors each year.

Image source: Getty Images.

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Source: Fool.com