Net Margin - Phillips 66 (NYSE:PSX)

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Price: 131.78 USD -6.88%

Market Cap: 53.1B USD

1.1%

Current

Average

4.8%

Industry

Net Margin measures how much net income is generated as a percentage of revenues received. It helps investors assess if a company's management is generating enough profit from its sales and whether operating costs and overhead costs are being contained.

Net Margin

1.1%

Net Income

1.5B

Revenue

132B

Net Margin Across Competitors

Country		Company	Market Cap	Net Margin
US		Phillips 66 NYSE:PSX	53.1B USD	1%
IN		Reliance Industries Ltd NSE:RELIANCE	20.9T INR	8%
US		Marathon Petroleum Corp NYSE:MPC	54.6B USD	2%
US		Valero Energy Corp NYSE:VLO	49.7B USD	1%
PL	O	Orlen SA PSE:PKN	615.6B CZK	2%
PL		Polski Koncern Naftowy Orlen SA WSE:PKN	106.6B PLN	2%
IN		Indian Oil Corporation Ltd NSE:IOC	2.3T INR	3%
JP		ENEOS Holdings Inc TSE:5020	2.9T JPY	1%
IN		Bharat Petroleum Corporation Ltd NSE:BPCL	1.6T INR	4%
FI		Neste Oyj OMXH:NESTE	14B EUR	-1%
TW		Formosa Petrochemical Corp TWSE:6505	469.2B TWD	1%

Phillips 66
Glance View

Economic Moat

None

Market Cap

53.1B USD

Industry

Energy

Phillips 66 is a prominent name in the energy industry, tracing its lineage back to the storied history of the American oil and gas sector. Its inception as an independent entity in 2012, following a spin-off from ConocoPhillips, marked a significant shift towards refining and midstream activities that have historically bolstered its financial viability. As a diversified energy manufacturing and logistics company, Phillips 66 has carved out a robust presence in the downstream sector, with its operations spanning from refining crude oil to marketing refined petroleum products. At the heart of its business model lies an intricate network of refineries, pipelines, and terminals that transform crude oil into valuable end-products like gasoline, diesel, and lubricants. This transformation process enables the company to deliver a wide array of products, catering to both consumer and industrial demands, which generates significant revenue streams for the company. In addition to its core refining operations, Phillips 66 extends its reach through its midstream and chemical segments, which play a crucial role in fortifying its market position. The midstream sector, operated through a partnership with Phillips 66 Partners LP, manages the complex logistics of transporting crude oil, refined products, and natural gas liquids across vast distances. Strategically aligned with its refining capabilities, the midstream segment ensures a seamless supply chain, enhancing the efficiency and profitability of its operations. Furthermore, the company's venture into the chemicals industry, represented by its alliance with Chevron in the formation of Chevron Phillips Chemical Company, exemplifies its commitment to diversification and growth. This joint venture widens the firm's portfolio, tapping into the high-margin petrochemical markets where everyday products, from plastics to synthetic rubbers, originate. By focusing on integration and maintaining a well-balanced business model, Phillips 66 navigates the cyclical nature of the energy market, aiming to deliver consistent value to its shareholders.

View PSX Analysis

PSX Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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	Walmart Inc NYSE:WMT	US
	Verizon Communications Inc NYSE:VZ	US
	Chevron Corp NYSE:CVX	US

	Johnson & Johnson NYSE:JNJ	209.3 USD -2.27%
	Berkshire Hathaway Inc NYSE:BRK.A	749 120 USD -1.29%
	Bank of America Corp NYSE:BAC	54.81 USD -0.94%
	Mastercard Inc NYSE:MA	566.02 USD -0.55%
	UnitedHealth Group Inc NYSE:UNH	334.2 USD -2.02%
	Exxon Mobil Corp NYSE:XOM	114.68 USD -2.62%

	Franklin Covey Co NYSE:FC	16.31 USD 0.55%
	Mohawk Industries Inc NYSE:MHK	110.3 USD -1.07%
	Ardmore Shipping Corp NYSE:ASC	11.16 USD -0.98%
	ASGN Inc NYSE:ASGN	47.75 USD -0.42%
	Skyworks Solutions Inc NASDAQ:SWKS	66.02 USD -0.53%
	Weatherford International PLC NASDAQ:WFRD	76.23 USD -3.49%

	Johnson & Johnson NYSE:JNJ	209.3 USD -2.27%
	Bank of America Corp NYSE:BAC	54.81 USD -0.94%
	Mastercard Inc NYSE:MA	566.02 USD -0.55%
	Salesforce Inc NYSE:CRM	254.91 USD 0.13%
	Abbvie Inc NYSE:ABBV	223.67 USD -1.66%
	Home Depot Inc NYSE:HD	352.68 USD -1.21%

Phillips 66
NYSE:PSX