Investors looking for valuable additions to their stock portfolios shouldn’t miss out on three great buys. Imperial Oil (TSX: IMO), Ecosynthetix (TSX: ECO), and Capstone Copper (TSX: CS) offers ‘real’ value-for-money. All the companies are stable and winning investments, thus far, in 2022.
Their business performances are reflected in the stocks. The energy stock is a dividend aristocrat, while the pair of materials stocks are due for a breakout. Also, the sectors they belong to are the top two performers among the TSX’s 11 primary sectors.
Little oil major
Imperial Oil’s market cap of $41.84 billion isn’t as huge as Canadian oil giants Enbridge and Canadian Natural Resources. However, its dividend track record of 140 years is the longest in the industry. Likewise, the dividend yield (2.21%) is modest, although there’s plenty of room for growth.
The energy stock has raised its dividends for 26 consecutive years. In Q4 2021, Imperial Oil paid a total of $949 million in dividends. Management also announced a 26% increase in payouts during the quarter. The $3 billion dividend payments in 2021 was a record shareholder return.
Its chairman, president, and CEO, Brad Corson, said 2021 demonstrated the strength of Imperial Oil’s integrated business model. Net income reached $2.4 billion compared to the $1.85 billion net loss in 2020. The upstream production for the year was also the highest annual production in over three decades.
Corson credits the stellar operational and financial results to successful structural cost reductions and relentless focus on reliable operations. He also stressed the capital-efficient growth in Imperial Oil’s core businesses.
The current share price of $62.68 (+38.2% year to date) is a good entry point. Based on market analysts’ high price forecast, Imperial Oil could climb 29.2% to $81 in 12 months.
Niche player
Ecosynthetix should rise from obscurity following the vastly improved sales in 2021. While net loss widened 32.4% year over year, net sales jumped 32.8% to $13.7 million compared to 2020. The $4.9 million net sales in Q4 2021 (+46% versus Q4 2020) was a record.
This $399.14 million renewable chemical company offers a range of sustainable engineered biopolymers. Ecosynthetix is also known in the specialty chemicals industry as a climate positive company. Its core products can reduce the use of harmful materials, such as formaldehyde and styrene-based chemicals.
EcoSynthetix’s CEO, Jeff MacDonald, said, “Our bio-based polymers offer significant advantages over traditional petroleum-based resins.” Management will capitalize on the advantages to deliver long-term, sustainable growth. Analysts expect to see the current share price of $6.70 to climb 27.3% to $8.53.
Soon-to-be copper champion
Capstone Copper is the resulting entity after the completed business combination of Capstone Mining and Mantos Copper (Bermuda) Limited on March 23, 2022. In the 2021 TSX30 List, this mining stock ranked fifth among TSX top growth stocks. At $7.15 per share, current investors enjoy a 28.1% year-to-date gain.
John MacKenzie, Capstone’s CEO, said the newly-formed $4.67 billion company is likely to become a Canadian-based copper champion. Based on analysts’ buy rating, the upside potential could be as high as 40%.
Great additions
The three stocks in focus aren’t necessarily undervalued, but the current headwinds won’t stall their earnings growth. You can purchase one or all as new additions to your portfolio.
