A Top Buy for Volatile Oil Markets

Article Excerpt

IMPERIAL OIL LTD. $38 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is Canada’s largest oil company, based on reserves and production. It also operates refineries, and 2,000 gas stations under the “Esso” banner. ExxonMobil Corp. owns roughly 70% of Imperial’s shares. This puts it in a strong position to weather the current downturn in oil prices. Imperial’s revenue fell from $17.3 billion in 2001 to $17.0 billion in 2002, but jumped to $28.2 billion in 2005 thanks to rising oil prices. Income slipped from $1.26 billion in 2001 to $1.22 billion in 2002. However, per-share earnings rose from $1.06 to $1.08 due to fewer shares outstanding. Earnings rose to $2.53 a share (total $2.6 billion) in 2005. Cash flow per share fell from $1.71 in 2001 to $0.41 in 2002, but grew to $3.07 in 2005. Also gains from lower gas prices Revenue in 2006 probably fell to around $26 billion, as energy prices moved down. However, the…

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