Competitor Analysis Husky Energy Husky is a Canadian integrated oil and gas producer, with operations in Canada and Asia. In recent years, they have improved completion of development plans. They suffer from poor netbacks in upstream operations and relatively low margins in their refining operations. One example of poor execution in oil sands growth is the Tucker oil sands project. The project was well over expected costs and incurred additional costs close to 50% higher than the industry average. Husky faces similar issues to Cenovus, as commodity prices and environmental regulations can have a significant impact on their growth and profitability. They also face a level of political risk as they operate in Asia as well as Canada. Husky’s oil sands operation provides potential long-term growth. Husky has a free cash flow yield of -1.36% which is …show more content…
They have excelled in return on invested capital, when compared to the industry averages. Imperial’s operations contain a combination of conventional and unconventional assets, which reduces risk of high operating cost fluctuations common with oil sands projects. They have a dividend yield below 1%, which is significantly below the industry average. Imperial’s own the largest oil sands operation located at Cold Lake and are continuing to develop their Kearl oil sands project. A distinct advantage for Imperial Oil is the large portion of shares outstanding being owned by ExxonMobil, which is considered a leader in capital allocation. This relationship can help to improve upon operations and optimal capital expenditure. Overall, Imperial Oil has impressive return on invested capital, but similarly to Husky currently have negative free cash flows. We believe they have relatively small growth in the near future and estimate a negative long-term EPS