Buy Canadian Index: Imperial Oil Is More Canadian Than Fairfax Financial

By Will Ashworth

On the surface, it would seem ludicrous to analyze how Canadian Imperial Oil (IMO) is. After all, it is controlled by Exxon Mobil (XOM) and has been American-owned since Imperial Oil sought out growth capital in 1898. 

John D. Rockefeller’s Standard Oil Trust acquired control of Imperial Oil for $350,000 in 1898 after providing the company with funding for growth. In 1911, after the U.S. government forced the trust to dissolve because it operated as a monopoly, the entity was broken up into 34 companies. 

One of the 34 companies was Standard Oil of New Jersey, or Esso. It changed its name to Exxon in 1973 and merged with Mobil in 1999, to become the present company. 

Read on, and I’ll explain why Imperial Oil, despite its early American investment, is more Canadian than Fairfax Financial (FFH), the Prem Watsa-controlled holding company I covered in my last commentary.

Imperial Oil Went Public on TSX

It’s hard to know when Imperial Oil first listed its shares on the Toronto Stock Exchange. It did a rights offering for 2.7 million new shares to existing shareholders in November 1951, which suggests it was sometime before that.

In addition to a TSX listing, IMO stock also trades on the NYSE American exchange in the U.S., formerly known as the NYSE MKT and AMEX. It is thought to have first listed its shares in the U.S. in 1993.  

10 points - A stock is listed only on a Canadian stock exchange.

6 points - A stock is dual-listed on a Canadian and a foreign exchange. 

3 points - A stock is only listed on a stock exchange outside Canada.

Imperial Oil gets 6 points for this criterion. 

Imperial Oil’s Revenues 

The company has three reporting segments: Upstream (24% of revenue), Downstream (75%) and Chemical (1%). The company doesn’t break out revenue by geography, which indicates virtually all of it is generated within Canada.   

10 points - A stock generates 75% of its revenue in Canada. 

6 points - A stock generates 50.1% to 74.9% of its revenue in Canada.

3 points - A stock generates 50.0% or less of its revenue in Canada. 

Imperial gets 10 points when it comes to revenue generation.  

Imperial Oil’s Canadian Ownership or Lack Thereof 

Exxon Mobil and its predecessor, Standard Oil, have owned approximately 70% of Imperial Oil since 1898. The American parent currently owns 69.6% of its stock. 

According to S&P Global Market Intelligence, institutional investors own 24.5% of its stock, while retail investors own the remaining 6%. 

It’s safe to say that non-Canadians own more than 75% of its shares.  

10 points - Canadian investors hold 75% or more of its shares.  

6 points - Canadian investors hold 50.1% to 74.9% of its shares.

3 points - Canadian investors hold 50.0% or less of their shares.

Imperial Oil gets 3 points. 

How Many of Imperial’s Employees Are Located in Canada?

As of Dec. 31, 2024, according to S&P Global Market Intelligence, Imperial Oil had 5,100 employees. With no indication of a meaningful presence outside Canada, 100% of its employees are Canadian-based.   

10 points - 75% of its employees are based in Canada. 

6 points - 50.1% to 74.9% of its employees are based in Canada. 

3 points - Less than 50.0% of its employees are based in Canada. 

Imperial Oil gets 10 points for this criterion. 

Does Imperial Oil Qualify for the Buy Canadian Index? 

With 29 points, despite having Exxon Mobil as a controlling shareholder, it qualifies for the Buy Canadian Index, while Fairfax Financial, with 26 points, did not.