Imperial Oil Limited (IMO.TO) (TSE:IMO) and Suncor Energy Inc. (SU.TO) (TSE:SU) are both large-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of current recommendations for Imperial Oil Limited (IMO.TO) and Suncor Energy Inc. (SU.TO), as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Imperial Oil Limited (IMO.TO) | 4 | 9 | 1 | 0 | 1.79 |
Suncor Energy Inc. (SU.TO) | 0 | 2 | 11 | 0 | 2.85 |
Imperial Oil Limited (IMO.TO) currently has a consensus price target of C$28.35, suggesting a potential downside of 0.28%. Suncor Energy Inc. (SU.TO) has a consensus price target of C$28.66, suggesting a potential upside of 9.77%. Given Suncor Energy Inc. (SU.TO)'s stronger consensus rating and higher probable upside, analysts plainly believe Suncor Energy Inc. (SU.TO) is more favorable than Imperial Oil Limited (IMO.TO).
Valuation & Earnings
This table compares Imperial Oil Limited (IMO.TO) and Suncor Energy Inc. (SU.TO)'s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Imperial Oil Limited (IMO.TO) | C$22.39 billion | 0.93 | C$-1,857,214,810.00 | C($2.53) | -11.24 |
Suncor Energy Inc. (SU.TO) | C$24.66 billion | 1.61 | C$-4,308,907,060.00 | C($2.83) | -9.23 |
Imperial Oil Limited (IMO.TO) has higher earnings, but lower revenue than Suncor Energy Inc. (SU.TO). Imperial Oil Limited (IMO.TO) is trading at a lower price-to-earnings ratio than Suncor Energy Inc. (SU.TO), indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Imperial Oil Limited (IMO.TO) and Suncor Energy Inc. (SU.TO)'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Imperial Oil Limited (IMO.TO) | N/A | N/A | N/A |
Suncor Energy Inc. (SU.TO) | N/A | N/A | N/A |
Dividends
Imperial Oil Limited (IMO.TO) pays an annual dividend of C$0.88 per share and has a dividend yield of 3.1%. Suncor Energy Inc. (SU.TO) pays an annual dividend of C$1.10 per share and has a dividend yield of 4.2%. Imperial Oil Limited (IMO.TO) pays out -34.8% of its earnings in the form of a dividend. Suncor Energy Inc. (SU.TO) pays out -38.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Suncor Energy Inc. (SU.TO) is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Suncor Energy Inc. (SU.TO) beats Imperial Oil Limited (IMO.TO) on 8 of the 10 factors compared between the two stocks.