ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Phillips 66's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 0.61%.
As of today (2026-06-25), Phillips 66's WACC % is 7.01%. Phillips 66's ROC % is 5.35% (calculated using TTM income statement data).
Phillips 66 earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Phillips 66 (MEX:PSX) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Phillips 66's WACC % is 7.01%. Phillips 66's ROC % is 5.35% (calculated using TTM income statement data).
Phillips 66 earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Phillips 66 ROC % Related Terms
Phillips 66 ROC % Historical Data
* Premium members only.
The historical data trend for Phillips 66's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Phillips 66 (MEX:PSX) has a ROC % of 0.61% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Phillips 66 and its competitors.
Is Phillips 66's ROC % too high?
Phillips 66's current ROC % is 0.61%. The Oil & Gas industry median ROC % is 3.63. Phillips 66's value of 0.61% is 83.2% below this industry median. Overall, Phillips 66 has a GF Score™ of 66/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Phillips 66's ROC % compare to MPC and VLO?
Phillips 66's ROC % of 0.61% can be compared against companies in the Oil & Gas industry. The industry median ROC % is 3.63. Phillips 66's value of 0.61% is 83.2% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for an Oil & Gas company?
The median ROC % among Oil & Gas companies is 3.63, based on 997 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Phillips 66's current ROC % of 0.61% is 83.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Phillips 66 and its competitors. For the Oil & Gas industry, the median ROC % is 3.63 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Phillips 66's current ROC % is 0.61%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Phillips 66 stock overvalued right now?
Based on GuruFocus' analysis, Phillips 66 (MEX:PSX) is currently considered Significantly Overvalued. The stock's GF Value™ is MXN2,552.07, compared to a current price of MXN3,169.00 — trading 24.2% above its estimated fair value. The current ROC % is 0.61% and 83.2% below the Oil & Gas industry median of 3.63. Phillips 66's overall GF Score™ is 66/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Phillips 66 (MEX:PSX), the current ROC % is 0.61% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Phillips 66 (MEX:PSX) Overvalued in 2026?
Based on GuruFocus' analysis, Phillips 66 stock appears to be overvalued.
The current stock price of MXN3,169.00 is trading 24.2% above its estimated GF Value™ of MXN2,552.07.
GuruFocus considers Phillips 66 to be Significantly Overvalued.
Key valuation signals for MEX:PSX:
ROC %: 0.61%
GF Value™: MXN2,552.07 vs. price of MXN3,169.00 (24.2% above fair value)
Industry Position: 83.2% below the Oil & Gas median
No single metric tells the full story. See the MEX:PSX stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Phillips 66 is an independent refiner that owns or holds interest in 10 refineries with a total crude throughput capacity of 2.0 million barrels per day, or mmb/d, at the end of 2025. The midstream segment comprises extensive transportation and NGL processing assets. It includes 70,000 miles of crude oil, refined petroleum product, NGL and natural gas pipeline systems, and a comprehensive set of refined petroleum product, NGL and crude oil terminals, gathering and processing plants and fractionation facilities and various other storage and loading facilities. Its CPChem chemical joint venture operates facilities primarily in the United States and the Middle East and produces olefins and polyolefins.
66GF Score
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