Don’t Chase Oil: 1 TSX Stock I’d Buy for the Long Haul

Investors can be so tempted to chase oil in Canada, and it makes sense. So much of our economy is tied up in oil and gas companies that when the price of oil jumps or drops, it quite literally takes the loonie with it.

Yet investors do not need to chase every jump in oil prices to make some money in energy. In fact, energy stocks with upstream production, refining, retail brands, and disciplined spending can hold up better through the cycle. So, let’s look at one of these on the TSX today, offering just that.

IMO

Imperial Oil (TSX:IMO) is one of Canada’s biggest integrated energy companies, producing oil from assets such as Kearl, Cold Lake, and Syncrude. It also refines crude into fuel and sells products through Esso and Mobil. This integrated model gives IMO stock more than one way to make money. When oil production faces pressure, refining can sometimes help balance results, and when refining margins weaken, upstream production can still provide cash flow.

In the last year, IMO stock has focused on efficiency, production growth, cost cuts, and shareholder returns. Its 2026 plan is now strong, as IMO stock expects upstream production of 441,000 to 460,000 barrels of oil equivalent per day (boe/d) this year. Meanwhile, capital and exploration spending should hit $2.0 billion to $2.2 billion in 2026, while its workforce will see a 20% reduction by the end of 2027.

Into earnings

Q1 2026 showed both the strength and the risk of owning an oil stock. IMO stock earned $940 million, or $1.94 per diluted share, down from $1.29 billion, or $2.52 per share, in Q1 2025. Cash flow from operating activities came in at $756 million, while cash flow excluding working capital reached $1.24 billion. Meanwhile, upstream production was steady at 419,000 gross boe/d, almost flat from 418,000 a year earlier.

All this considered, if you were to look at IMO stock, it may not scream “bargain” after its major price run, up 76% in the last year alone. Yet despite this, the company still offers a solid 1.9% dividend yield for investors.  So you’re not just buying IMO stock for total results, but also for buybacks, balance sheet strength, and operating quality, rather than for a massive yield.

Future focus

Looking ahead, the long-term outlook still looks attractive as IMO stock has several levers. Higher upstream production should help if management hits its 2026 target. Downstream business could still generate steady cash from Canadian fuel demand, even though 2026 refinery throughput guidance is lower at 395,000 to 405,000 boe/d because of planned maintenance. Despite this, the Strathcona refinery and Esso/Mobil brands give Imperial a strong position across the fuel chain.

So, if you’re an investor looking to stock the chase when it comes to oil prices, IMO stock has the size, infrastructure, refining assets, retail brands, and shareholder returns. Of course, lower oil prices, weaker refining margins, operational outages, environmental costs, and political pressure on the oil sands all show it’s not a perfect situation. The recent quarter showed us that. Yet with IMO stock still hitting nearly $1 billion in quarterly profit during this time, it shows exactly why it’s such a long-haul buy.

Bottom line

Oil prices will always move around; that’s just the way it is. You can either burn your cash by chasing those prices, or simply sit back and plan accordingly for the next move. When it comes to IMO stock, this also comes with income from even a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTIMO$180.8938$3.48$132.24Quarterly$6,873.82

In short, for investors who want one TSX energy stock built for the long run, IMO stock looks far more compelling than simply chasing the latest oil-price surge.

The post Don’t Chase Oil: 1 TSX Stock I’d Buy for the Long Haul appeared first on The Motley Fool Canada.

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More reading

• The Canadian Companies Thriving During Trade Tensions
• 2 Canadian Energy Stocks I’d Buy and Hold Right Now
• 3 Canadian Stocks That Could Be an Ideal Fit for a $7,000 TFSA Investment
• 2 Canadian Stocks That Could Be Poised to Surge in 2026

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.