If you’re after a good dividend stock, it’s important to consider one that has increased its payout over the years. Through regular dividend increases, you can see your dividend income rise in the future, which can help to offset the effects of inflation.
Last week, oil and gas company Phillips 66 (NYSE:PSX) announced that it was raising its dividend by 10%. With the increase, the company will now be paying shareholders a quarterly dividend of $1.15. Since first paying a dividend in 2012, Phillips has been raising its dividend at an average compounded annual growth rate of 16%. The new annual dividend rate of $4.60 per share means that its yield is up to 2.7% -- that’s about double the S&P 500 average.
To collect $1,000 in dividends from the stock over the course of a full year, you would need to invest approximately $37,000 into the company.
The oil and gas company's strategic investments in energy infrastructure and innovation, alongside its commitment to safety and sustainability, position Phillips as a key player in the energy sector.
In 2023, Phillips reported more than $7 billion in profit on sales of $147.4 billion. Its strong bottom line means there could be room for more dividend increases in the future as Phillips’ payout ratio is less than 30%. The stock is also a potentially attractive value buy, trading at just 11 times its trailing earnings.
For dividend investors looking for exposure to the oil and gas sector, Phillips makes for an attractive stock to buy. Year to date, its shares are up 28%.
