Updating your Cyclical-Growth Payers: Imperial Oil Ltd.

Article Excerpt

IMPERIAL OIL LTD. $17 is still a buy. This Canadian Resources leader (Toronto symbol IMO; Cyclical-Growth Payer Portfolio, Resources sector; Shares outstanding: 734.1 million; Market cap: $12.5 billion; Dividend yield: 5.2%; 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. Imperial last raised its dividend in July 2019. Investors now receive $0.22 a share, up 15.8% from $0.19. The new annual rate of $0.88 yields 5.2%. In response to lower oil prices, Imperial cut its production in the second quarter of 2020 by 13.3%, to 347,000 barrels a day (92% oil, 8% natural gas) from 400,000 barrels a year earlier. As a result, Imperial’s revenue in the quarter dropped 59.9%, to $3.71 billion from $9.26 billion. The company also lost $526 million, or $0.72 a share, in the quarter, compared to its profit of $1.21 billion, or $1.57, a year earlier. Imperial’s cash flow per share…