This 150-Year-Old Company Just Hit $60 Billion – At 8x Earnings!

Alpesh Patel|July 3, 2025

Founded when Ulysses S. Grant was president.

Still growing when AI rules the world.

This 150-year-old American institution just hit $60 billion in market cap – and somehow the market prices it at recession-level multiples.

You know the name. You’ve probably used its products dozens of times. But you’ve likely never thought of it as a dividend-paying powerhouse trading at 8x forward earnings.

While tech companies burn cash at 25x multiples, this proven performer generates steady returns with…

• 150 years of continuous operations
• AI-powered process optimization
• Consistent dividend payments
• 53% discount to fair value

Sometimes the best opportunities aren’t the flashy newcomers – they’re the reliable giants the market forgot to properly price.

Click on the image below for the name and ticker.

TRANSCRIPT

Hi, friends. Welcome to the Dealmaker’s Diary and Stock of the Week.

Here’s a stock we’ve all heard of but probably haven’t thought much about in terms of investing. It’s a name we’re all familiar with but probably haven’t considered as a stock opportunity.

Founded in 1875, Phillips 66 (PSX) is probably one of the oldest companies in the United States. You’re all familiar with it. They’re involved in renewable fuels, something that didn’t exist in 1875.

Market cap is $60 billion. I wouldn’t have guessed that level. I would have put it in the billions, but I would have estimated it at that range. Forward P/E ratio is only eight times multiples.

And of course, it’s a dividend play.

Before we look at the numbers, I like to look at AI use in these companies as a great educational tool so you’re up to speed with how the world is using AI.

But there’s another reason I brought up Phillips… obviously Middle East problems. Now you might say they’re all resolved, but this brought it to my attention, so that’s why I wanted to discuss it with you as a stock.

What do we have with this company?

This is how they’re using AI: predictive asset management – good, nice to see, interesting. Refinery process optimization. None of these things I would have thought of unless I spent a whole day thinking and meditating on it, but it’s interesting to know for two reasons. One is so that we’re connected with what’s going on in the world – it might even inspire us in our own businesses. But also because if they didn’t do all of this, we’d be worried that they’re being left behind.

I always find it fascinating.

So let’s dive into the numbers. Growth-Value-Income rating of 7. It had been lower earlier in the year. That’s my proprietary indicator looking at the growth of a stock, valuation, and dividend yields and all of those factors.

So it meets my minimum criteria.

CROCI is a bit low. I’d like it to be above 10%, so just so you know. And Sortino, I’d really like to be above 0.7, 0.8 actually. Volatility is good at below 20%.

So it doesn’t really tick all the boxes as strongly as I would like, but I’m going to show you what caught my eye…

If we can get the move I’ve drawn on the chart – and there’s no guarantee we will – and given that there’s this broader uptrend from which it tends to bounce up… Now make no mistake, the market has a habit of scaring people before resuming. But I’d really be looking at that trend to continue, and that was my thinking.

On a discounted cash flow, you’re looking at a 53% undervaluation as well, so that supports the argument to some extent.

I hope you found that useful, interesting, and informative. Thank you.

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