Are you looking for dividends that last? Energy stocks are some of the best options. These stocks aren’t worried about one or two earnings reports or a new product coming out. These are concerned with long-term contracts and decades of income-producing activity.
Yet when it comes to finding a diamond amongst duds, there’s one dividend stock that might be the best option right now. And that’s Imperial Oil (TSX: IMO). Let’s get into why.
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Into earnings
First, let’s consider earnings. Imperial stock recently reported its second quarter for 2025. Now I know, I just said that these companies don’t have to worry about one or two earnings. However, these do certainly paint a picture of where this company has come from, and where it’s headed.
In this case, Imperial Oil stock recently reported net income of $949 million, a decrease from $1.135 billion the year before. The drop was due to lower upstream realizations, as well as downstream margin capture. That being said, the company actually achieved record-high second-quarter upstream production! This hit 427,000 barrels per day, which was the highest in over 30 years. The driving factor? Exceptional performance at its Kearl and Cold Lake operations.
More to come
What’s more, this isn’t just a short-term occurrence. The dividend stock reported that it has completed the construction of Canada’s largest renewable diesel facility at Stratcona. This aims at delivering lower-emission fuels. Furthermore, it returned $367 million in dividends and announced an accelerated share-repurchasing program. So, investors have plenty to look forward to in the next year.
Right now, that dividend looks stronger than ever. The third-quarter dividend came in at $0.72 per share, or $2.88 per share on an annual basis. The payout ratio is also a very modest 29%, suggesting plenty of room not just to support dividends, but to grow them. Right now, a $7,000 investment could bring in $164 each year!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| IMO | $121.97 | 57 | $2.88 | $164.16 | Quarterly | $6,942.29 |
Considerations
Now, there are a few things to watch. Imperial Oil stock did see that net income come down from lower bitumen and synthetic crude oil realizations. Net income was particularly hit by lower oil prices. Refinery throughput also dropped due to unplanned downtime.
Looking ahead, investors should continue to monitor oil price movements and its refinery utilization rates. These, as we’ve seen, significantly impact the company’s performance. Yet the success and returns of the new Strathcona renewable diesel facility could be a huge factor for not just this year’s growth, but long-term targets.
Bottom line
Imperial Oil is a prime dividend stock that looks as though it’s only improving. The company continues to report a strong foundation and even more production — all while offering a substantial and stable dividend that looks like it’ll only go up from here.
Furthermore, it looks like it’s going to keep this up for years to come, with an investment in renewable diesel and a pivot towards sustainability. So, if you’re looking for a dividend stock that lasts, consider this energy stock a prime move.
