PSX vs XOM: Dividend Comparison
Dividend data as of
Phillips 66 (PSX) and Exxon Mobil Corp (XOM) are both in the Energy sector, making them natural rivals for dividend investors. PSX edges ahead on yield at 3.02% versus XOM's 2.64%. For dividend growth, XOM leads with a 5-year CAGR of 11.2% versus PSX's 7.0%. Both stocks carry a "Safe" dividend safety rating. PSX is a Dividend Contender while XOM is a Dividend Aristocrat.
Verdict
Yield Analysis
PSX yields 0.38% more than XOM. In dollar terms, PSX pays $4.75/share vs XOM's $4.00/share annually.
Dividend Growth
PSX: Dividend growth is slowing — the 3-year CAGR of 6.3% trails the 5-year rate of 7.0% and the 10-year rate of 10.8%.
XOM: Dividend growth is slowing — the 3-year CAGR of 4.3% trails the 5-year rate of 11.2% and the 10-year rate of 6.6%.
Dividend Safety
PSX: The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
XOM: The payout ratio of 60% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in PSX vs XOM today?
At $159.16 per share, $10,000 buys about 62.8 shares of Phillips 66 (PSX). Each share pays $4.75 per year in dividends, so the position starts out generating roughly $298 per year — about $25 a month.
At $148.59 per share, $10,000 buys about 67.3 shares of Exxon Mobil Corp (XOM). Each share pays $4.00 per year in dividends, so the position starts out generating roughly $269 per year — about $22 a month.
PSX is the larger income stream from day one: $29 per year more on the same $10,000 invested.
What could $10,000 of PSX or XOM income look like in 10 years?
Phillips 66 (PSX) has raised its dividend about 7.0% a year over the past five years. If that pace held, the $302 per year that $10,000 generates today at the current 3.02% yield would reach $596 per year by 2036 — a 6.0% yield on the original cost.
Exxon Mobil Corp (XOM) has raised its dividend about 11.2% a year over the past five years. If that pace held, the $264 per year that $10,000 generates today at the current 2.64% yield would reach $760 per year by 2036 — a 7.6% yield on the original cost.
On those trailing rates, XOM pays more in 2036: $760 versus $596 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would XOM's dividend growth overtake PSX's higher yield?
Exxon Mobil Corp (XOM) yields less today (2.64% vs 3.02%) but has grown its dividend faster — 11.2% vs 7.0% a year over the past five years. If both trends continued, a $10,000 position in XOM would start out-earning the same position in PSX around 2030 (roughly 4 years from now), paying about $403 per year at the crossover. Before that point, PSX pays more each year; after it, the gap compounds in XOM's favor.
Can PSX and XOM afford their dividends?
Phillips 66 (PSX) earns $10.79 per share against $4.75 paid out in dividends — 2.3x coverage (a 44% payout ratio).
Exxon Mobil Corp (XOM) earns $6.70 per share against $4.00 paid out in dividends — 1.7x coverage (a 60% payout ratio).
PSX's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for XOM if earnings weaken.
Which fits an early-retirement income portfolio better, PSX or XOM?
For income you need right now, Phillips 66 (PSX) leads: $100,000 invested today pays about $252 a month at the current 3.02% yield, versus $220 a month from Exxon Mobil Corp (XOM) at 2.64%.
With a decade or more before the income is needed, XOM's faster dividend growth (11.2% vs 7.0% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: PSX has raised its dividend 13 consecutive years; XOM has raised its dividend 42 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $802/yr in PSX vs $986/yr in XOM by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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