Phillips 66 Raises Quarterly Dividend 4.7% to $1.33

Phillips 66 raised its quarterly dividend 4.7% to $1.33 per share from $1.27. The shares trade ex-dividend on November 17, 2026, and the payment is due December 1, 2026, taking the annual dividend per share to $5.32.

Why the dividend changed

Phillips 66 tied the increase to the strength of its operations and its capacity to generate sustainable cash flow. Chairman and Chief Executive Mark Lashier said the decision reflected the “continued strength and resilience of the business” and the company’s commitment to long-term shareholder returns. Management also described the increase as part of a disciplined capital-allocation policy that balances shareholder distributions, investment and financial strength. Phillips 66 dividend release

The explanation is consistent with the company’s latest reported operating trend. Phillips 66 posted a sharp sequential earnings recovery in the second quarter as refining margins improved, Midstream volumes reached records and Marketing and Specialties benefited from stronger margins. Cash flow from operations turned positive, while the company reduced debt and continued both dividends and share repurchases. Phillips 66 second-quarter results

The integrated portfolio also is expanding. Dos Picos II reached full production, and Phillips 66 advanced additional Permian gas-processing and Gulf Coast fractionation capacity. Those projects are intended to add fee-oriented Midstream activity alongside the more cyclical Refining business. The dividend change is a regular quarterly increase, not the mechanical result of a stock split, merger, spinoff or special distribution.

Dividend track record

The recent payment history shows steady increases rather than a single catch-up adjustment. The ex-dividend amount was $1.15 on February 24, 2025, rose to $1.20 on May 19, 2025, and increased to $1.27 on February 23, 2026. The new $1.33 rate is the latest step in that progression.

Full-year payments rose from $3.60 per share in 2020 to $4.75 in 2025. The pace varied with business conditions: the annual total rose 0.6% in 2021, 9.7% in 2023, 7.1% in 2024 and 5.6% in 2025. That pattern indicates management maintained growth through different refining cycles but adjusted the size of each increase. The dividend has grown for 13 consecutive years, while its five-year record is 5.9% annual growth. Phillips 66’s release similarly frames annual dividend growth as a consistent priority since the company’s formation.

Is the dividend covered?

The dividend consumes 28% of earnings. That leaves most reported profit available for debt reduction, investment, repurchases and protection against the earnings swings common in refining and chemicals.

SmarterDividends rates the dividend A with a safety score of 89. That grade means very safe (score 80-100), based on the current earnings coverage and payment record. It does not eliminate operating risk. Phillips 66’s results remain sensitive to refining margins, utilization, chemical-market conditions and renewable-fuel economics, as detailed in its quarterly filing. Phillips 66 quarterly report

The low earnings payout ratio gives management room to absorb some volatility without immediately changing the dividend. The second-quarter improvement in cash generation and debt reduction supports that assessment, while future coverage still depends on sustained operating cash flow.

Yield and valuation

At a share price of $288.85, the new annual dividend produces a forward yield of 1.84%. That is below the Energy sector median forward yield of 3.96%. The comparison shows that Phillips 66 offers less current income per dollar invested than the median Energy company despite the higher cash payment.

The yield gap partly reflects the stock’s 106.8% gain over one year. A higher share price mechanically reduces the yield unless dividend growth keeps pace. At the new rate, 100 shares generate $532.00 in annual dividend income.

SmarterDividends estimates fair value at $99.74 and classifies the shares as overvalued, corresponding to 65% downside from the current price. That valuation assessment is separate from dividend safety: the A grade addresses payment coverage, while the fair-value verdict addresses the price paid for that income stream.

What to watch

The immediate dates are November 17, 2026, when the shares trade ex-dividend, and December 1, 2026, when the payment is scheduled. After that, the main coverage indicators are operating cash flow, debt reduction, refining margins and reliability across the company’s processing network.

Capital spending also matters. Phillips 66 is expanding its natural-gas-liquids chain while participating in the Western Gateway Pipeline project with Kinder Morgan and HF Sinclair. Western Gateway final investment decision Upcoming results will show whether those investments and shareholder distributions continue alongside the balance-sheet improvement reported in the second quarter. The mix among dividends, repurchases, growth spending and debt reduction will provide the clearest evidence of management’s capital-allocation priorities.