IMPERIAL OIL LTD. $43 - Toronto symbol IMO

IMPERIAL OIL LTD. $43 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $36.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) has slowed work on its proposed Mackenzie pipeline project, which would pump natural gas from the Arctic to Alberta. (Imperial owns 34.4% of this project, which has already received regulatory approval.)

That’s because rising production of natural gas from shale rock has depressed gas prices in the past few years. As well, higher prices for raw materials would increase the project’s estimated cost of $16.2 billion.

If Imperial decides to proceed, the new line could start up in 2018. The company feels that gas prices will be higher by then, as more coal-fired power plants switch to cleaner-burning natural gas.

Imperial Oil is a buy.

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