TSX:STN

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Market Cap

CA$6.4b

Last Updated

2021/08/02 22:02 UTC

Data Sources

Company Financials +

Executive Summary

Stantec Inc. provides professional consulting services in the area of infrastructure and facilities in Canada, the United States, and internationally. More Details

Rewards

Earnings are forecast to grow 14.92% per year

Earnings grew by 0.8% over the past year

Risk Analysis

STN passed our risk checks.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has Stantec's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STN is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: STN's weekly volatility (2%) has been stable over the past year.


Market Performance


7 Day Return

1.1%

STN

1.4%

CA Professional Services

1.1%

CA Market


1 Year Return

34.7%

STN

39.8%

CA Professional Services

29.1%

CA Market

Return vs Industry: STN underperformed the Canadian Professional Services industry which returned 39.8% over the past year.

Return vs Market: STN exceeded the Canadian Market which returned 29.1% over the past year.


Shareholder returns

STNIndustryMarket
7 Day1.1%1.4%1.1%
30 Day3.4%6.7%-0.5%
90 Day1.2%10.0%3.3%
1 Year36.6%34.7%42.4%39.8%33.0%29.1%
3 Year80.9%72.2%144.7%112.0%31.5%18.7%
5 Year115.5%99.1%167.0%117.1%50.7%28.5%

Long-Term Price Volatility Vs. Market

How volatile is Stantec's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

35.89x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: STN (CA$58.08) is trading above our estimate of fair value (CA$35.63)

Significantly Below Fair Value: STN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: STN is poor value based on its PE Ratio (35.9x) compared to the Canadian Professional Services industry average (23.8x).

PE vs Market: STN is poor value based on its PE Ratio (35.9x) compared to the Canadian market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: STN is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: STN is good value based on its PB Ratio (3.3x) compared to the CA Professional Services industry average (3.5x).


Future Growth

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

14.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STN's forecast earnings growth (14.9% per year) is above the savings rate (1.5%).

Earnings vs Market: STN's earnings (14.9% per year) are forecast to grow faster than the Canadian market (14.1% per year).

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

Revenue vs Market: STN's revenue (4.1% per year) is forecast to grow slower than the Canadian market (5.3% per year).

High Growth Revenue: STN's revenue (4.1% 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 (13.8%).


Past Performance

How has Stantec performed over the past 5 years?

10.6%

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%) are higher than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: STN's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: STN's earnings growth over the past year (0.8%) is below its 5-year average (10.6% per year).

Earnings vs Industry: STN earnings growth over the past year (0.8%) exceeded the Professional Services industry -18.3%.


Return on Equity

High ROE: STN's Return on Equity (9.2%) is considered low.


Financial Health

How is Stantec's financial position?


Financial Position Analysis

Short Term Liabilities: STN's short term assets (CA$1.5B) exceed its short term liabilities (CA$940.2M).

Long Term Liabilities: STN's short term assets (CA$1.5B) exceed its long term liabilities (CA$1.5B).


Debt to Equity History and Analysis

Debt Level: STN's debt to equity ratio (34.6%) is considered satisfactory.

Reducing Debt: STN's debt to equity ratio has reduced from 38.3% to 34.6% over the past 5 years.

Debt Coverage: STN's debt is well covered by operating cash flow (104%).

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?

1.14%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: STN's dividend (1.14%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.59%).

High Dividend: STN's dividend (1.14%) is low compared to the top 25% of dividend payers in the Canadian market (4.57%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, STN has been paying a dividend for less than 10 years.

Growing Dividend: STN's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.9%), STN's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STN's dividends in 3 years are forecast to be well covered by earnings (25.5% payout ratio).


Next Steps

Management

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

3.7yrs

Average management tenure


CEO

Gord Johnston (55 yo)

3.58yrs

Tenure

CA$5,028,820

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 ($USD4.03M) is about average for companies of similar size in the Canadian market ($USD3.60M).

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 (3.7 years average tenure).


Board Members

Experienced Board: STN's board of directors are considered experienced (3.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: STN 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.


Top Shareholders

Company Information

Stantec Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Stantec Inc.
  • Ticker: STN
  • Exchange: TSX
  • Founded: 1954
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: CA$6.447b
  • Shares outstanding: 111.01m
  • Website: https://www.stantec.com

Number of Employees


Location

  • Stantec Inc.
  • 10220-103 Avenue NW
  • Suite 400
  • Edmonton
  • Alberta
  • T5J 0K4
  • Canada

Listings


Biography

Stantec Inc. provides professional consulting services in the area of infrastructure and facilities in Canada, the United States, and internationally. The company provides consulting services in engineerin...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/02 22:02
End of Day Share Price2021/07/30 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.