New pipeline adds to its prospects

Article Excerpt

IMPERIAL OIL LTD. $96 is a buy. The company (Toronto symbol IMO; Conservative and Income Growth Portfolios, Resources sector; Shares outstanding: 604.8 million; Market cap: $58.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.5%; TSINetwork Rating: Average; www.imperialoil.ca) produced an average 421,000 barrels of oil equivalent per day in the first quarter of 2024. That’s up 1.9% from 413,000 a year earlier. Revenue in the quarter also improved 1.3%, to $12.28 billion from $12.12 billion. However, higher operating costs cut Imperial’s cash flow by 2.1% to $1.52 billion from $1.55 billion. Due to fewer shares outstanding, cash flow per share rose 6.8%, to $2.83 from $2.65. The startup of the expanded TransMountain pipeline, which will let Imperial ship more oil to overseas markets, should help lift the company’s projected cash flow per share by about 8% to $11.76 in 2024. The stock trades at just 8.2 times that estimate. The $2.40 dividend yields 2.5%. Imperial Oil is a buy. buy…