High-quality operations make Imperial a buy

Article Excerpt

IMPERIAL OIL LTD. $33 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 802.7 million; Market cap: $26.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.7%; TSINetwork Rating: Average; www.imperialoil.ca) is a leading Canadian producer and refiner on crude oil. U.S.-based ExxonMobil (New York symbol XOM) owns 69.6% of Imperial. About 60% of the company’s production comes from its Alberta oil sands operations. Imperial also has conventional oil and natural gas operations in the West and holds stakes in projects off the coast of Atlantic Canada. The company’s other operations include three refineries (one in Alberta, and two in Ontario), and a petrochemical plant in Sarnia, Ontario. It also supplies gasoline to over 1,800 Esso and Mobil stations in Canada. New project helps spur turnaround Due to lower crude prices, Imperial’s revenue fell 30.9%, from $36.2 billion in 2014 to $25.05 billion in 2016. Oil prices moved higher in 2017, which is why Imperial’s revenue gained 16.3% to $29.1 billion. In 2018, revenue jumped…