With 448% gains over the last five years, Imperial Oil (TSX: IMO) has crushed the broader market and many of its energy sector peers. What’s even more impressive is how IMO stock has kept pushing higher even in a tougher macro environment where oil prices have stayed choppy. Investors who’ve stayed with it have been rewarded handsomely, while many others are now wondering if it’s too late to get in.
Before discussing whether Imperial Oil still deserves a place on investors’ watchlists, let’s quickly review what’s keeping its stock on an upward trajectory.
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What’s driving Imperial Oil’s recent momentum?
If you don’t know it already, Imperial Oil is one of Canada’s top integrated energy firms, involved in everything from oil and gas production to refining, petrochemicals, and fuel distribution. Some of its major assets include Cold Lake, Kearl, Syncrude, and the Strathcona refinery.
After rallying by over 35% so far in 2025, IMO stock is currently trading at $117.43 per share with a market cap of $59.7 billion. It also offers a 2.5% annualized dividend yield, paid quarterly.
The company’s recent performance has mainly been supported by its record upstream production, cost savings at Kearl, and a continued focus on shareholder returns. Despite no major spike in oil prices, Imperial has kept growing with the help of better reliability, stronger margins, and strategic project execution.
What the latest financials tell us
In the second quarter of 2025, Imperial posted a net profit of $949 million, which marked a decline compared to the same period a year ago. This drop was primarily due to weaker pricing in its upstream segment and slightly lower downstream margin capture.
Nevertheless, the company still generated nearly $1.5 billion in cash from operations and ended the quarter with $2.4 billion in cash, providing it with plenty of financial flexibility. Notably, Imperial’s upstream production averaged 427,000 barrels per day, making it the highest second-quarter output in over three decades.
On the downstream side, Imperial’s refinery throughput dipped slightly last quarter due to planned maintenance and some unplanned downtime, but overall operations remained stable.
Projects setting up future growth
In July, the company achieved first production at its renewable diesel facility at Strathcona. This project is designed to meet growing demand for lower-emissions fuel and is backed by strong regulatory and customer support. With its proprietary technology and integration, Imperial Oil expects strong margin upside as ramp-up continues.
One of its other key projects is the Leming Steam-Assisted Gravity Drainage (SAGD) redevelopment at Cold Lake, which began steaming in June. Interestingly, first oil is expected later this year, with output ramping into 2026.
These initiatives suggest that Imperial isn’t just maintaining its current performance but preparing for the future, with a growing focus on efficiency, emissions reduction, and capital discipline.
Is Imperial Oil stock a buy now?
For long-term investors, Imperial Oil continues to offer a great mix of strong cash generation, stable dividends, disciplined capital allocation, and forward-looking projects. Even after its impressive five-year run, the company is still finding ways to create value through operational improvements and smart investments.
If you’re looking for a well-run, integrated energy stock with reliable dividends and continued growth, Imperial Oil could still be worth buying at current levels.
