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Imperial Oil (IMO) is a Top-Ranked Value Stock: Should You Buy?

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

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Imperial Oil (IMO)

Founded in 1880, Calgary-based Imperial Oil Limited is one of the largest integrated oil companies of Canada, mainly engaged in the oil and gas production, petroleum products refining and marketing and chemical business. It is Canada’s largest jet fuel supplier and a major producer of asphalt. Notably, Imperial Oil is the subsidiary of one the world’s largest publicly traded oil and gas company Exxon Mobil Corporation which holds 69.6% ownership stake.

IMO sits at a Zacks Rank #1 (Strong Buy), holds a Value Style Score of B, and has a VGM Score of A. Compared to the Oil and Gas - Integrated - Canadian industry's P/E of 5.6X, shares of Imperial Oil are trading at a forward P/E of 5.6X. IMO also has a PEG Ratio of 0.2, a Price/Cash Flow ratio of 8.9X, and a Price/Sales ratio of 0.7X.

A company's earnings performance is important for value investors as well. For fiscal 2022, two analysts revised their earnings estimate higher in the last 60 days for IMO, while the Zacks Consensus Estimate has increased $0.79 to $8.34 per share. IMO also holds an average earnings surprise of 2.4%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding IMO to their portfolios.


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Zacks Investment Research