Imperial Oil Ltd.

Companies that generate a lot of free cash flow (regular cash flow less capital expenditures) are generally in a strong financial position. For investors, free cash flow eliminates the distraction of non-cash deductions like goodwill, purchased R&D, depreciation and so on....

We continue to recommend you maintain some exposure to oil stocks as part of the Resources portion of your stock holdings. High-quality integrated producer Imperial Oil is up 24% since we made it a #1 Buy for 2024. With its record oil production and its stock now trading at low multiples to its cash flow, Imperial is even more attractive for your new buying.


IMPERIAL OIL LTD., $96.04, is a #1 Buy for 2024. The company (Toronto symbol IMO; Shares o/s: 535.8 million; Market cap: $51.5 billion; TSINetwork Rating: Average; Dividend yield: 2.5%) gets over 90% of its production from the oil sands of Alberta....

According to the International Energy Agency, global oil demand grew by 2.3 million barrels per day in 2023 to 103 million barrels. The agency now expects oil use to increase by 1.3 million barrels a day in 2024. That higher demand has helped push up crude oil prices by 20% since the start of the year to $86 U.S....

Imperial Oil is now trading at all-time highs—and in fact, the stock has delivered a whopping 1,484.6% gain (not including dividends) for our investors since we first recommended it as a buy in April 1995. Still, we think the stock can go even higher.

Imperial is what is termed an “integrated oil”—that is, it has both upstream (production) and downstream (refining and petrochemicals) operations....

In the past few years, Suncor and Imperial Oil have used their improving cash flow to pay down debt. That put them in a better position to cope with the current slump in crude oil prices, and to keep raising their dividends.


SUNCOR ENERGY INC....

Higher interest rates mean dividend-paying stocks must increasingly compete with fixed-income investments for investor interest. However, sustainable dividends still offer an attractive and growing income stream for investors.


Meanwhile, dividend-focused ETFs often follow strategies that can set investors up for maximum long-term gains with the least amount of risk....

Petro-Canada was Canada’s second largest integrated oil company. Its production centred on Western Canada before its sale to Suncor.

This week’s Spotlight analysis of Alimentation Couche-Tard shows that the potentially risky tactic of growth-by-acquisition can pay off nicely when a well-managed company applies that strategy conservatively in a fragmented industry with low-risk takeover opportunities.

We first recommended Alimentation Couche-Tard in December 2008, at $15.50 a share....

Improving crude prices are letting Imperial Oil invest in new green energy projects that will help it comply with more-stringent environmental regulations. The company is also using its strong cash flow to reward investors.


IMPERIAL OIL LTD. $70 is a buy. This company (Toronto symbol IMO; Conservative and Income Growth Portfolios, Resources sector; Shares outstanding: 584.2 million; Market cap: $40.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Average; www.imperialoil.ca) gets about 90% of its production from oil sands operations in Alberta....

The best Canadian dividend stock picks include those with a long history of dividends, often a recent dividend increase, and a commitment by management to keep offering an attractive dividend.