Head to Head Survey: Chicago Bridge & Iron (CBI) & Stantec (STN)

Chicago Bridge & Iron (NYSE: CBI) and Stantec (NYSE:STN) are both construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Institutional and Insider Ownership

70.7% of Chicago Bridge & Iron shares are owned by institutional investors. Comparatively, 54.4% of Stantec shares are owned by institutional investors. 1.1% of Chicago Bridge & Iron shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Chicago Bridge & Iron and Stantec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chicago Bridge & Iron -13.33% -10.86% -2.04%
Stantec 2.24% 10.69% 5.03%

Analyst Ratings

This is a breakdown of current recommendations for Chicago Bridge & Iron and Stantec, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chicago Bridge & Iron 1 10 3 0 2.14
Stantec 0 1 2 0 2.67

Chicago Bridge & Iron presently has a consensus price target of $19.15, suggesting a potential upside of 19.71%. Stantec has a consensus price target of $40.00, suggesting a potential upside of 43.37%. Given Stantec’s stronger consensus rating and higher possible upside, analysts plainly believe Stantec is more favorable than Chicago Bridge & Iron.

Risk and Volatility

Chicago Bridge & Iron has a beta of 2.21, meaning that its share price is 121% more volatile than the S&P 500. Comparatively, Stantec has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Dividends

Chicago Bridge & Iron pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. Stantec pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Chicago Bridge & Iron pays out -1.3% of its earnings in the form of a dividend. Stantec pays out 51.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Chicago Bridge & Iron has increased its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Chicago Bridge & Iron and Stantec’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chicago Bridge & Iron $10.68 billion 0.15 -$313.16 million ($10.53) -1.52
Stantec $3.22 billion 0.99 $98.59 million $0.77 36.23

Stantec has lower revenue, but higher earnings than Chicago Bridge & Iron. Chicago Bridge & Iron is trading at a lower price-to-earnings ratio than Stantec, indicating that it is currently the more affordable of the two stocks.

Summary

Stantec beats Chicago Bridge & Iron on 10 of the 17 factors compared between the two stocks.

Chicago Bridge & Iron Company Profile

Chicago Bridge & Iron Company N.V. provides services to customers in energy infrastructure market. The Company provides services, such as conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management and environmental services. Its Engineering and Construction segment provides engineering, procurement, and construction (EPC) services. Its Fabrication Services segment provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules, and manufacturing and distribution of pipe and fittings. The Technology segment provides process technology licenses and associated engineering services, and catalysts, for petrochemical and refining industries, and offers process planning and project development services.

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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