Stantec (TSX:STN) - Share price, News & Analysis

STN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	3/6
Financial Health	3/6
Dividends	4/6

STN Stock Overview

Stantec Inc. provides engineering, architecture, and environmental consulting services in the areas of infrastructure and facilities in Canada, the United States, and internationally.

Rewards

Trading at 36.4% below our estimate of its fair value

Earnings are forecast to grow 19.36% per year

Earnings have grown 11.8% per year over the past 5 years

Risk Analysis

Has a high level of debt

Stantec Competitors

Accenture

NYSE:ACN

US$181.3b

International Business Machines

NYSE:IBM

US$121.5b

Lockheed Martin

NYSE:LMT

US$116.6b

Infosys

NSEI:INFY

₹6.4t

Price History & Performance

Summary of all time highs, changes and price drops for Stantec
Historical stock prices
Current Share Price	CA$56.51
52 Week High	CA$73.10
52 Week Low	CA$53.05
Beta	0.78
1 Month Change	-11.33%
3 Month Change	-15.11%
1 Year Change	5.02%
3 Year Change	72.13%
5 Year Change	82.94%
Change since IPO	4,154.87%

Recent News & Updates

May 15

Stantec (TSE:STN) Is Increasing Its Dividend To CA$0.18

The board of Stantec Inc. ( TSE:STN ) has announced that it will be increasing its dividend on the 15th of July to...

May 13

Stantec (TSE:STN) Hasn't Managed To Accelerate Its Returns

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...

Apr 13

I Ran A Stock Scan For Earnings Growth And Stantec (TSE:STN) Passed With Ease

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling...

Shareholder Returns

	STN	CA Professional Services	CA Market
7D	-0.1%	1.4%	2.8%
1Y	5.0%	6.5%	5.9%

Return vs Industry: STN matched the Canadian Professional Services industry which returned 5.2% over the past year.

Return vs Market: STN matched the Canadian Market which returned 4.3% over the past year.

Price Volatility

Is STN's price volatile compared to industry and market?
STN volatility
STN Average Weekly Movement	3.3%
Professional Services Industry Average Movement	7.1%
Market Average Movement	9.8%
10% most volatile stocks in CA Market	16.7%
10% least volatile stocks in CA Market	4.2%

Stable Share Price: STN is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: STN's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1954	25,000	Gord Johnston	https://www.stantec.com

Stantec Inc. provides engineering, architecture, and environmental consulting services in the areas of infrastructure and facilities in Canada, the United States, and internationally. The company provides consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. It also offers structural, mechanical, electrical, plumbing, and hydraulics engineering services; transportation advisory, planning and analytics, transport engineering, and technical design; paleontological and archaeological services for the rail, transportation, water, and power and energy sectors; environmental and infrastructure services; and environmental and cultural resource compliance services.

Stantec Fundamentals Summary

How do Stantec's earnings and revenue compare to its market cap?
STN fundamental statistics
Market Cap	CA$6.15b
Earnings (TTM)	CA$194.60m
Revenue (TTM)	CA$3.81b

32.2x

P/E Ratio

1.6x

P/S Ratio

Is STN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
STN income statement (TTM)
Revenue	CA$3.81b
Cost of Revenue	CA$1.74b
Gross Profit	CA$2.06b
Other Expenses	CA$1.87b
Earnings	CA$194.60m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.76
Gross Margin	54.21%
Net Profit Margin	5.11%
Debt/Equity Ratio	64.3%

How did STN perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

39%

Payout Ratio

Does STN pay a reliable dividends?

See STN dividend history and benchmarks

When do you need to buy STN by to receive an upcoming dividend?
Stantec dividend dates
Ex Dividend Date	Jun 29 2022
Dividend Pay Date	Jul 15 2022
Days until Ex dividend	42 days
Days until Dividend pay date	58 days

Does STN pay a reliable dividends?

See STN dividend history and benchmarks

Valuation

Is Stantec undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

36.4%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: STN (CA$56.51) is trading below our estimate of fair value (CA$88.89)

Significantly Below Fair Value: STN is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: STN is poor value based on its PE Ratio (32.2x) compared to the North American Professional Services industry average (17.7x).

PE vs Market: STN is poor value based on its PE Ratio (32.2x) compared to the Canadian market (11.4x).

Price to Earnings Growth Ratio

PEG Ratio: STN is poor value based on its PEG Ratio (1.7x)

Price to Book Ratio

PB vs Industry: STN is overvalued based on its PB Ratio (3.2x) compared to the CA Professional Services industry average (2.8x).

Future Growth

How is Stantec forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

19.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: STN's forecast earnings growth (19.4% per year) is above the savings rate (1.6%).

Earnings vs Market: STN's earnings (19.4% per year) are forecast to grow faster than the Canadian market (7.4% per year).

High Growth Earnings: STN's earnings are forecast to grow, but not significantly.

Revenue vs Market: STN's revenue (6.1% per year) is forecast to grow slower than the Canadian market (6.3% per year).

High Growth Revenue: STN's revenue (6.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: STN's Return on Equity is forecast to be low in 3 years time (17.5%).

Past Performance

How has Stantec performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

11.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: STN has high quality earnings.

Growing Profit Margin: STN's current net profit margins (5.1%) are higher than last year (5%).

Past Earnings Growth Analysis

Earnings Trend: STN's earnings have grown by 11.8% per year over the past 5 years.

Accelerating Growth: STN's earnings growth over the past year (7.8%) is below its 5-year average (11.8% per year).

Earnings vs Industry: STN earnings growth over the past year (7.8%) underperformed the Professional Services industry 32.6%.

Return on Equity

High ROE: STN's Return on Equity (9.8%) is considered low.

Financial Health

How is Stantec's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: STN's short term assets (CA$1.7B) exceed its short term liabilities (CA$1.1B).

Long Term Liabilities: STN's short term assets (CA$1.7B) do not cover its long term liabilities (CA$2.1B).

Debt to Equity History and Analysis

Debt Level: STN's net debt to equity ratio (54.1%) is considered high.

Reducing Debt: STN's debt to equity ratio has increased from 54.8% to 64.3% over the past 5 years.

Debt Coverage: STN's debt is well covered by operating cash flow (27.2%).

Interest Coverage: STN's interest payments on its debt are well covered by EBIT (7.9x coverage).

Balance Sheet

Dividend

What is Stantec current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.27%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: STN's dividend (1.27%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: STN's dividend (1.27%) is low compared to the top 25% of dividend payers in the Canadian market (4.99%).

Stability and Growth of Payments

Stable Dividend: STN's dividends per share have been stable in the past 10 years.

Growing Dividend: STN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.6%), STN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (27.4%), STN's dividend payments are well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Commercial Services industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

4.4yrs

Average management tenure

CEO

Gord Johnston (55 yo)

4.33yrs

Tenure

CA$6,300,452

Compensation

Mr. Gordon Allan Johnston, P.Eng., also known as Gord, has been the President, Chief Executive Officer and Director of Stantec Inc. since January 1, 2018. Mr. Johnston served as an Executive Vice President...

CEO Compensation Analysis

Compensation vs Market: Gord's total compensation ($USD4.91M) is above average for companies of similar size in the Canadian market ($USD3.41M).

Compensation vs Earnings: Gord's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: STN's management team is considered experienced (4.4 years average tenure).

Board Members

Experienced Board: STN's board of directors are considered experienced (4.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31