Refineries will support their dividends

Article Excerpt

When it comes to oil stocks, we recommend dividend investors stick with integrated producers such as Imperial Oil and Chevron. That’s because low oil prices lift profits at their refineries. The support that offers integrated firms makes their dividends more stable than those of pure-play oil producers. IMPERIAL OIL LTD. $23 is still a buy. This Canadian Resources leader (Toronto symbol IMO; Cyclical-Growth Payer Portfolio, Resources sector; Shares outstanding: 734.1 million; Market cap: $16.9 billion; Dividend yield: 3.8%; Dividend Sustainability Rating: Above Average; www.imperialoil.ca) is the country’s third-largest publicly traded oil company after Suncor and Canadian Natural Resources. ExxonMobil (New York symbol XOM) owns 69.6% of the company. In July 2019, Imperial raised its dividend by 15.8%. The annual rate of $0.88 yields 3.8%. The company has increased its dividend each year for the past 24 years. In the quarter ended March 31, 2020, Imperial produced an average of 419,000 barrels of oil equivalent a day (93% oil, 7% natural gas). That’s up 14.2% from 353,000 a..

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