Diamonds and Dogs

10/8/21

The oil stocks are on fire. Phillips 66 (PSX) rose 3% today and is up 30% in the last month as the price of oil is shooting higher. Thanks to the higher price of oil, Phillips 66 is raising their dividend and repaying $500 million in debt. The company has increased their dividend 10 times since 2012, resulting in an 18% compound annual growth rate. They have also reduced their debt balance by $1 billion this year and will continue prioritizing debt repayment to return to pre-pandemic levels.

Cable stocks took a hit on a downgrade. Comcast (CMCSA) and Charter (CHTR) both fell over 4% as an analyst at Wells Fargo downgrade the sector saying the cable companies are facing both growing competition from the telcos—and each other—and an increasing need to spend on network buildout. He thinks the result will be higher-than-expected costs, lower-than-expected free cash flow, a scramble for new subscribers—and lower stock prices. Good for consumers maybe.