Imperial Oil could pay out special dividend, analyst predicts

Imperial Oil could join the ranks of Canadian energy producers that have dished out special dividends as debt levels come down and cash flow booms, according to one Bay Street analyst.

In a report to clients Tuesday, Menno Hulshof at TD Securities stated he sees “strong potential” for the Calgary-based integrated oil and gas producer to launch another substantial issuer bid (SIB), after scooping up $2.5 billion of its shares at a price of $77 apiece in June.

He also pointed out that Imperial recently fast-tracked a normal course issuer bid (NCIB), announcing last month that it plans to tap out the buyback program by the end of October instead of next June.

“Management continues to allude to multiple mechanisms for returning capital to shareholders, potentially before year-end. A second SIB is still most likely, in our view, but we believe a special dividend also remains a possibility,” Hulfshof said in his report, while describing Imperial’s balance sheet as “best-in-class.”