In an updated SEC filing on Sept. 9, Warren Buffett (Trades, Portfolio) reported adding 3,511,470 shares of Phillips 66 (PSX, Financial) at an average price of $79.37 per share in purchases recorded on Sept. 4, 8 and 9.
The addition increased Buffett’s holding by about 6% for a total of 61,486,926 shares. Year-to-date, Phillips 66 is one of Buffett’s better-performing holdings, with the stock up 25%. IBM (IBM, Financial), Buffett’s third-largest position as of the second quarter, has declined 13% year-to-date. Walmart (WMT, Financial) is down more than twice as much at 33%, and has faced much negative attention in recent weeks after it said it expects earnings to decline by 6% to 12% in fiscal 2017.
Today, Phillips 66 announced its adjusted earnings for the third quarter 2015 were $1,647 million, up from $1,140 million in the year-ago quarter. This was driven by strong results in the refining and marketing segments. The company also plans to increase its share repurchase program by $2 billion.
The stock closed at $86.60 yesterday and trades relatively cheaply at 11x earnings, which is below the median industry PE at 15.1. Phillips 66 pays a 2.45% dividend yield with a 27% payout ratio.
Buffett sold a prior position in the oil and gas company in the third quarter 2014, reinitiating the holding during the following quarter when the price dipped into the $70s.
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