IMPERIAL OIL LTD (IMO) Stock Analysis
IMPERIAL OIL LTD (IMO) Stock Analysis
Analysis from 10-Q filed 2025-11-03. Data as of Q4 2025.
Overall Grade: F (Concerning)
IMPERIAL OIL LTD faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 9.6% | Near cost of capital |
| FCF Margin | 10.0% | Healthy cash flow |
| Debt/Equity | 0.2x | Conservative leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore IMPERIAL OIL LTD: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: IMPERIAL OIL LTD earns 9.6% ROIC, Top 50% in Energy
IMPERIAL OIL LTD's trailing-twelve-month ROIC of 9.6% ranks Top 50% in Energy companies (sector median: 6.9%), driven by NOPAT margin of 6.9% combined with asset turnover of 1.1x. Source: 10-Q filed 2025-11-03.
| Metric | IMO | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.6% | Adequate | Above sector median of 6.9% |
| Return on Equity (ROE) | 13.6% | Adequate | Moderate equity returns |
| Operating Margin | 9.1% | Adequate | Moderate operational efficiency |
Cash Flow: IMPERIAL OIL LTD generates $4.7B FCF at 10.0% margin, positive NaN/8 quarters
IMPERIAL OIL LTD generated $4.7B in free cash flow (TTM), a 10.0% FCF margin, a margin that ranks Top 50% in Energy. Operating cash flow exceeds net income by 2.1x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-03.
| Metric | IMO | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 10.0% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $4.7B | Good | Positive cash generation |
| OCF/Net Income | 2.1x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: IMPERIAL OIL LTD at 0.2x leverage
IMPERIAL OIL LTD's debt-to-equity ratio of 0.2x reflects conservative leverage. Total debt of $3.5B offset by $1.1B in cash. Source: 10-Q filed 2025-11-03.
| Metric | IMO | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.2x | Excellent | Conservative capital structure |
| Net Cash Position | $-2.3B | Warning | Net debt position |
Valuation: IMPERIAL OIL LTD trades at 13.3x earnings
IMPERIAL OIL LTD trades at a P/E of 13.3x. Free cash flow yield of 10.8% offers attractive cash returns relative to price.
| Metric | IMO | Rating | Context |
|---|---|---|---|
| P/E Ratio | 13.3x | Adequate | Reasonable valuation |
| EV/Sales | 1.0x | Excellent | Attractive revenue multiple |
| FCF Yield | 10.8% | Excellent | Attractive cash return |
| Dividend Yield | 3.3% | Adequate | Meaningful income |
Capital Allocation: IMPERIAL OIL LTD returns 10.8% shareholder yield
IMPERIAL OIL LTD's total shareholder yield is 10.8% (dividends 3.3% + buybacks 7.5%). Source: 10-Q filed 2025-11-03.
| Metric | IMO | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 10.8% | Excellent | Dividend + buyback yield combined |
| Buyback Yield | 7.5% | Good | Active share repurchases |
| Total Capital Returned (TTM) | $4.6B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.6% | Top 50% | 1.4x above |
| Free Cash Flow Margin | 10.0% | Top 50% | 1.1x above |
| Operating Margin | 9.1% | Top 50% | 1.0x at |
| Return on Equity (ROE) | 13.6% | Top 50% | 1.6x above |
| P/E Ratio | 13.3x | N/A | - |
Financial Scorecard
| Metric | IMO | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.6% | Adequate | Top 50% of sector (median: 6.9%) |
| Free Cash Flow Margin | 10.0% | Adequate | Top 50% of sector (median: 8.8%) |
| Debt to Equity Ratio | 15.6% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 13.3x | Adequate | Attractively valued |
| Free Cash Flow Yield | 10.8% | Excellent | High cash return |
Frequently Asked Questions
Q: What is IMPERIAL OIL LTD's Return on Invested Capital (ROIC)?
IMPERIAL OIL LTD (IMO) has a trailing twelve-month Return on Invested Capital (ROIC) of 9.6%. This compares above the sector median of 6.9%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is IMPERIAL OIL LTD's Free Cash Flow Margin?
IMPERIAL OIL LTD (IMO) has a free cash flow margin of 10.0%, generating $4.7 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is IMPERIAL OIL LTD stock overvalued or undervalued?
IMPERIAL OIL LTD (IMO) trades at a P/E ratio of 13.3x, which is above the sector median of N/A. The EV/Sales multiple is 1.0x. Free cash flow yield is 10.8%, which represents an attractive cash return to investors.
Q: Does IMPERIAL OIL LTD pay a dividend?
IMPERIAL OIL LTD (IMO) currently pays a dividend yield of 3.3%. Including share buybacks, the total shareholder yield is 10.8%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is IMPERIAL OIL LTD's revenue and earnings growth?
IMPERIAL OIL LTD (IMO) declined revenue by 8.6% year-over-year. Earnings per share decreased by 28.4% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is IMPERIAL OIL LTD buying back stock?
IMPERIAL OIL LTD (IMO) repurchased $3.2 billion of stock over the trailing twelve months. This represents a buyback yield of 7.5%.
Q: How does IMPERIAL OIL LTD compare to competitors in Energy?
Compared to other companies in Energy, IMPERIAL OIL LTD (IMO) shows: ROIC of 9.6% is above the sector median of 6.9% (Top 34%). FCF margin of 10.0% exceeds the sector median of 8.8% (Top 50% of sector). These rankings are based on MetricDuck's analysis of all Energy companies with available SEC filings.
Q: What warning signs should I watch for with IMPERIAL OIL LTD?
Investors in IMPERIAL OIL LTD (IMO) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-03. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.