IMPERIAL OIL LTD (IMO.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:IMO - CA4530384086 - Common Stock
136.87 CAD
-1.6 (-1.16%)
Overall IMO gets a fundamental rating of 6 out of 10. We evaluated IMO against 214 industry peers in the Oil, Gas & Consumable Fuels industry. IMO gets an excellent profitability rating and is at the same time showing great financial health properties. IMO has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year IMO was profitable.
- IMO had a positive operating cash flow in the past year.
- IMO had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years IMO had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 9.31%, IMO belongs to the top of the industry, outperforming 94.39% of the companies in the same industry.
- IMO's Return On Equity of 16.89% is amongst the best of the industry. IMO outperforms 95.33% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 10.67%, IMO belongs to the top of the industry, outperforming 96.26% of the companies in the same industry.
- IMO had an Average Return On Invested Capital over the past 3 years of 15.78%. This is significantly above the industry average of 6.53%.
- The 3 year average ROIC (15.78%) for IMO is well above the current ROIC(10.67%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 16.89% | ||
| ROIC | 10.67% |
ROA(3y)13.3%
ROA(5y)8.22%
ROE(3y)25.05%
ROE(5y)15.58%
ROIC(3y)15.78%
ROIC(5y)N/A
1.3 Margins
- IMO has a Profit Margin of 8.30%. This is in the better half of the industry: IMO outperforms 61.68% of its industry peers.
- IMO's Profit Margin has improved in the last couple of years.
- IMO has a Operating Margin (10.43%) which is in line with its industry peers.
- IMO's Operating Margin has improved in the last couple of years.
- IMO has a Gross Margin (22.56%) which is comparable to the rest of the industry.
- IMO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.43% | ||
| PM (TTM) | 8.3% | ||
| GM | 22.56% |
OM growth 3Y11.07%
OM growth 5Y14.66%
PM growth 3Y12.16%
PM growth 5Y7.59%
GM growth 3Y1.78%
GM growth 5Y3.23%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so IMO is creating value.
- Compared to 1 year ago, IMO has less shares outstanding
- The number of shares outstanding for IMO has been reduced compared to 5 years ago.
- The debt/assets ratio for IMO has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.44 indicates that IMO is not in any danger for bankruptcy at the moment.
- IMO has a better Altman-Z score (4.44) than 83.64% of its industry peers.
- IMO has a debt to FCF ratio of 0.84. This is a very positive value and a sign of high solvency as it would only need 0.84 years to pay back of all of its debts.
- IMO's Debt to FCF ratio of 0.84 is amongst the best of the industry. IMO outperforms 93.46% of its industry peers.
- A Debt/Equity ratio of 0.17 indicates that IMO is not too dependend on debt financing.
- IMO has a Debt to Equity ratio of 0.17. This is in the better half of the industry: IMO outperforms 67.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 0.84 | ||
| Altman-Z | 4.44 |
ROIC/WACC1.4
WACC7.61%
2.3 Liquidity
- IMO has a Current Ratio of 1.47. This is a normal value and indicates that IMO is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.47, IMO is in the better half of the industry, outperforming 73.36% of the companies in the same industry.
- IMO has a Quick Ratio of 1.17. This is a normal value and indicates that IMO is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.17, IMO is in the better half of the industry, outperforming 69.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
- The earnings per share for IMO have decreased by -2.41% in the last year.
- Measured over the past years, IMO shows a very strong growth in Earnings Per Share. The EPS has been growing by 35.08% on average per year.
- IMO shows a decrease in Revenue. In the last year, the revenue decreased by -6.96%.
- Measured over the past years, IMO shows a quite strong growth in Revenue. The Revenue has been growing by 8.60% on average per year.
EPS 1Y (TTM)-2.41%
EPS 3Y35.05%
EPS 5Y35.08%
EPS Q2Q%-6.87%
Revenue 1Y (TTM)-6.96%
Revenue growth 3Y11.04%
Revenue growth 5Y8.6%
Sales Q2Q%-9.13%
3.2 Future
- The Earnings Per Share is expected to grow by 4.33% on average over the next years.
- IMO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.24% yearly.
EPS Next Y-8.43%
EPS Next 2Y-6.9%
EPS Next 3Y-2.91%
EPS Next 5Y4.33%
Revenue Next Year-5.95%
Revenue Next 2Y0.54%
Revenue Next 3Y2.01%
Revenue Next 5Y-2.24%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 15.34, the valuation of IMO can be described as correct.
- 67.29% of the companies in the same industry are more expensive than IMO, based on the Price/Earnings ratio.
- IMO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.32.
- IMO is valuated rather expensively with a Price/Forward Earnings ratio of 17.47.
- Based on the Price/Forward Earnings ratio, IMO is valued a bit cheaper than 62.15% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, IMO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.34 | ||
| Fwd PE | 17.47 |
4.2 Price Multiples
- IMO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. IMO is cheaper than 64.02% of the companies in the same industry.
- 70.56% of the companies in the same industry are more expensive than IMO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.07 | ||
| EV/EBITDA | 9.28 |
4.3 Compensation for Growth
- The excellent profitability rating of IMO may justify a higher PE ratio.
- A cheap valuation may be justified as IMO's earnings are expected to decrease with -2.91% in the coming years.
PEG (NY)N/A
PEG (5Y)0.44
EPS Next 2Y-6.9%
EPS Next 3Y-2.91%
5. Dividend
5.1 Amount
- IMO has a Yearly Dividend Yield of 2.15%.
- IMO's Dividend Yield is a higher than the industry average which is at 2.82.
- IMO's Dividend Yield is comparable with the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.15% |
5.2 History
- On average, the dividend of IMO grows each year by 23.44%, which is quite nice.
- IMO has been paying a dividend for at least 10 years, so it has a reliable track record.
- IMO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)23.44%
Div Incr Years30
Div Non Decr Years34
5.3 Sustainability
- 33.92% of the earnings are spent on dividend by IMO. This is a low number and sustainable payout ratio.
- IMO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.92%
EPS Next 2Y-6.9%
EPS Next 3Y-2.91%
IMPERIAL OIL LTD / IMO.CA FAQ
Can you provide the ChartMill fundamental rating for IMPERIAL OIL LTD?
ChartMill assigns a fundamental rating of 6 / 10 to IMO.CA.
Can you provide the valuation status for IMPERIAL OIL LTD?
ChartMill assigns a valuation rating of 5 / 10 to IMPERIAL OIL LTD (IMO.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for IMPERIAL OIL LTD?
IMPERIAL OIL LTD (IMO.CA) has a profitability rating of 8 / 10.
What are the PE and PB ratios of IMPERIAL OIL LTD (IMO.CA) stock?
The Price/Earnings (PE) ratio for IMPERIAL OIL LTD (IMO.CA) is 15.34 and the Price/Book (PB) ratio is 2.84.
What is the earnings growth outlook for IMPERIAL OIL LTD?
The Earnings per Share (EPS) of IMPERIAL OIL LTD (IMO.CA) is expected to decline by -8.43% in the next year.