Contrasting Stantec (STN) & Its Peers

Stantec (NYSE: STN) is one of 48 publicly-traded companies in the “Construction & Engineering” industry, but how does it compare to its competitors? We will compare Stantec to related businesses based on the strength of its risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Institutional & Insider Ownership

57.0% of Stantec shares are owned by institutional investors. Comparatively, 79.1% of shares of all “Construction & Engineering” companies are owned by institutional investors. 11.1% of shares of all “Construction & Engineering” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Stantec and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Stantec $2.84 billion $305.54 million 36.35
Stantec Competitors $3.12 billion $137.70 million 19.14

Stantec’s competitors have higher revenue, but lower earnings than Stantec. Stantec is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Stantec and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stantec 2.31% 10.67% 4.95%
Stantec Competitors 1.97% -27.41% 2.31%

Risk and Volatility

Stantec has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Stantec’s competitors have a beta of 1.27, meaning that their average stock price is 27% more volatile than the S&P 500.

Dividends

Stantec pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Stantec pays out 51.3% of its earnings in the form of a dividend. As a group, “Construction & Engineering” companies pay a dividend yield of 1.5% and pay out 125.9% of their earnings in the form of a dividend. Stantec has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Stantec and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stantec 0 3 2 0 2.40
Stantec Competitors 157 896 1550 17 2.54

Stantec presently has a consensus target price of $32.75, suggesting a potential upside of 15.52%. As a group, “Construction & Engineering” companies have a potential upside of 20.30%. Given Stantec’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Stantec has less favorable growth aspects than its competitors.

Summary

Stantec competitors beat Stantec on 8 of the 15 factors compared.

Stantec Company Profile

Stantec Inc. is a provider of professional services in the area of infrastructure and facilities for clients in the public and private sectors. The Company’s operates through four segments Consulting Services-Canada, Consulting Services-United States, Consulting Services-Global and Construction Services. The Company’s services include engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, construction services, project management, and project economics, from initial project concept and planning through to design, construction, commissioning, maintenance, decommissioning and remediation. The Company provides professional consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental services, project management and project economics in the area of infrastructure and facilities, principally under fee-for-service agreements with clients.

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