Is Imperial Oil Limited (IMO) the Best Canadian Dividend Stock to Buy For Income Investors?

As an income investor, you're always on the lookout for reliable, consistent dividend-paying stocks. One name that often comes up in discussions is Imperial Oil Limited (IMO), Canada's largest jet fuel supplier and a major producer of asphalt. But is IMO the best Canadian dividend stock for income investors? Let's dive into the data and find out.



Dividend History and Growth

Imperial Oil has a long history of paying dividends, with data available since 1989. The company has consistently increased its dividend payout over the years, with some fluctuations due to market conditions and business performance. As of November 05, 2024, IMO's TTM dividend payout is $1.78, with a dividend yield of 2.52%.



Dividend Yield and Payout Ratio

IMO's current dividend yield is 2.52%, which is competitive with other Canadian dividend stocks. The company's payout ratio is 25%, indicating that it retains a significant portion of its earnings for reinvestment in the business. This suggests that IMO is committed to growing its dividend payments over time.

Dividend Consistency and Safety

Imperial Oil has maintained a consistent quarterly dividend payment since at least 2009, with no missed or skipped payments. The company's strong financial position and stable earnings make its dividend payments reliable and safe for income investors.

Peer Comparison

To determine if IMO is the best Canadian dividend stock, let's compare it to some of its peers:

| Company | Dividend Yield | Payout Ratio |
| --- | --- | --- |
| Imperial Oil (IMO) | 2.52% | 25% |
| Cenovus Energy (CVE) | 3.00% | 50% |
| Suncor Energy (SU) | 3.04% | 60% |
| Canadian Natural Resources (CNQ) | 3.51% | 70% |
| Exxon Mobil (XOM) | 2.67% | 30% |
| Lukoil (LKOH.ME) | 13.29% | 50% |

While IMO's dividend yield is lower than some of its peers, its payout ratio is more conservative, indicating a stronger commitment to dividend growth and financial stability.

Conclusion

Imperial Oil Limited (IMO) is a solid choice for income investors looking for a reliable, consistent dividend-paying stock. With a long history of dividend growth, a competitive dividend yield, and a conservative payout ratio, IMO offers a attractive combination of income and potential for capital appreciation. However, it's essential to consider your personal investment goals, risk tolerance, and diversification needs when making investment decisions. Always do your own research and consult with a financial advisor before investing.