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Is Imperial Oil (IMO) Stock Undervalued Right Now?

·3 min read

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Imperial Oil (IMO). IMO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also note that IMO holds a PEG ratio of 0.26. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IMO's PEG compares to its industry's average PEG of 0.54. IMO's PEG has been as high as 0.41 and as low as 0.21, with a median of 0.29, all within the past year.

Another valuation metric that we should highlight is IMO's P/B ratio of 1.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.65. Over the past 12 months, IMO's P/B has been as high as 2.20 and as low as 1.02, with a median of 1.54.

Suncor Energy (SU) may be another strong Oil and Gas - Integrated - Canadian stock to add to your shortlist. SU is a # 1 (Strong Buy) stock with a Value grade of A.

Shares of Suncor Energy currently holds a Forward P/E ratio of 5.33, and its PEG ratio is 0.52. In comparison, its industry sports average P/E and PEG ratios of 5.51 and 0.54.

SU's price-to-earnings ratio has been as high as 12.17 and as low as 5.29, with a median of 8.25, while its PEG ratio has been as high as 4.06 and as low as 0.51, with a median of 1.21, all within the past year.

Suncor Energy also has a P/B ratio of 1.41 compared to its industry's price-to-book ratio of 1.65. Over the past year, its P/B ratio has been as high as 2, as low as 0.88, with a median of 1.39.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Imperial Oil and Suncor Energy are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IMO and SU feels like a great value stock at the moment.


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