If you are planning to invest $2,000 in an energy stock right now, the goal should be simple. Find a company that is profitable, efficient, and committed to rewarding its shareholders with consistent dividends. As oil prices hold strong and demand remains solid, investing in the right energy stock could deliver passive income along with long-term capital gains.
And Imperial Oil (TSX:IMO) fits that profile well. In fact, it could be the smartest investment you make this year. Let me explain why.
Why Imperial Oil could be the smartest pick in the energy sector
What makes Imperial Oil one of the best energy stocks to consider now is its century-long track record in the Canadian oil and gas sector. This Calgary-based company is involved in every part of the energy cycle, from oil exploration to refining to selling fuels and chemicals. That’s what makes it a fully integrated energy business and a reliable stock to hold for the long term.
Currently trading at $111.15 per share, IMO stock has a market cap of $56.5 billion and offers a 2.6% annualized dividend yield, with payouts made quarterly. After delivering double-digit gains for four straight years, the stock is up nearly 25% in 2025 — continuing its strong run.
What’s driving the stock higher lately
The Canadian oil giant continues to benefit from strong commodity prices and a narrow spread between Canadian Western Select and WTI (West Texas Intermediate) crude. These factors are continuing to help Imperial boost margins in its upstream segment, which produced 418,000 barrels per day in the first quarter of 2025. Notably, two of its major assets Cold Lake and Kearl remained strong contributors during the quarter.
With a refinery utilization rate of 91% and sales of 455,000 barrels per day, Imperial Oil showed it could maintain stable cash flows even in a mixed environment.
Strong earnings back the momentum
Its strong stock movement has also been supported by Imperial’s impressive financial growth trends. In the March quarter, the company posted a 7.8% YoY (year-over-year) increase in its adjusted net profit to $1.3 billion.
As a result, its adjusted earnings climbed by 13% YoY to $2.52 per share, while operating cash flow, excluding working capital, was a solid $1.8 billion.
Focusing on big projects
And there’s another key reason that could help this top energy stock keep climbing. Imperial’s construction of a renewable diesel facility in Strathcona is on track, which was expected to start operations by mid-2025. This will be Canada’s largest facility of its kind and could support both Imperial’s earnings and emissions goals in the future.
Moreover, on the upstream side, its Leming Steam-Assisted Gravity Drainage redevelopment project is set to go live later this year, which could add 9,000 barrels per day to its production capacity. With these strong fundamentals in place, Imperial could be one of the top energy stocks to own right now.
