TSX:STN

Stock Analysis Report

Executive Summary

Stantec Inc. provides professional consulting services in the area of infrastructure and facilities for clients in the public and private sectors in Canada, the United States, and internationally.

Rewards

Trading at 21% below its fair value

Earnings are forecast to grow 14.28% per year

Earnings grew by 7.4% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Good value 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.9%

STN

1.3%

CA Professional Services

0.1%

CA Market


1 Year Return

21.8%

STN

36.8%

CA Professional Services

12.2%

CA Market

Return vs Industry: STN underperformed the Canadian Professional Services industry which returned 36.8% over the past year.

Return vs Market: STN exceeded the Canadian Market which returned 12.2% over the past year.


Shareholder returns

STNIndustryMarket
7 Day2.9%1.3%0.1%
30 Day4.8%3.3%0.2%
90 Day22.7%7.9%0.4%
1 Year24.1%21.8%39.9%36.8%15.9%12.2%
3 Year9.5%4.2%55.3%43.1%16.0%5.4%
5 Year24.3%15.2%106.7%78.9%33.5%13.7%

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?

21.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STN (CA$36.57) is trading below our estimate of fair value (CA$46.3)

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


Price To Earnings Ratio

PE vs Industry: STN is good value based on its PE Ratio (23.7x) compared to the Professional Services industry average (79.7x).

PE vs Market: STN is poor value based on its PE Ratio (23.7x) compared to the Canadian market (15.5x).


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 good value based on its PB Ratio (2.2x) compared to the CA Professional Services industry average (2.9x).


Next Steps

Future Growth

How is Stantec forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

14.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STN's forecast earnings growth (14.3% per year) is above the savings rate (1.4%).

Earnings vs Market: STN's earnings (14.3% per year) are forecast to grow faster than the Canadian market (9.9% per year).

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

Revenue vs Market: STN's revenue (3.1% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: STN's revenue (3.1% 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 (14.8%).


Next Steps

Past Performance

How has Stantec performed over the past 5 years?

0.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STN has high quality earnings.

Growing Profit Margin: STN's current net profit margins (4.8%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: STN's earnings have grown by 0.9% per year over the past 5 years.

Accelerating Growth: STN's earnings growth over the past year (7.4%) exceeds its 5-year average (0.9% per year).

Earnings vs Industry: STN earnings growth over the past year (7.4%) exceeded the Professional Services industry -9.3%.


Return on Equity

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


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Stantec's financial position?


Financial Position Analysis

Short Term Liabilities: STN's short term assets (CA$1.6B) exceed its short term liabilities (CA$933.1M).

Long Term Liabilities: STN's short term assets (CA$1.6B) do not cover its long term liabilities (CA$1.8B).


Debt to Equity History and Analysis

Debt Level: STN's debt to equity ratio (53.5%) is considered high.

Reducing Debt: STN's debt to equity ratio has increased from 28.1% to 53.5% over the past 5 years.

Debt Coverage: STN's debt is well covered by operating cash flow (35.9%).

Interest Coverage: STN's interest payments on its debt are well covered by EBIT (4.9x coverage).


Balance Sheet

Inventory Level: STN has a low level of unsold assets or inventory.

Debt Coverage by Assets: STN's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

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

1.59%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Stantec before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.6%marketbottom25%2.0%markettop25%5.6%industryaverage1.3%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: STN's dividend (1.59%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2%).

High Dividend: STN's dividend (1.59%) is low compared to the top 25% of dividend payers in the Canadian market (5.65%).


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 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37%), 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 (22% payout ratio).


Next Steps

Management

What is the CEO of Stantec's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Gord Johnston (53yo)

1.9yrs

Tenure

CA$3,067,128

Compensation

Mr. Gordon Allan Johnston, 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 of Infr ...


CEO Compensation Analysis

Compensation vs Market: Gord's total compensation ($USD2.32M) is about average for companies of similar size in the Canadian market ($USD2.90M).

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


Management Age and Tenure

2.0yrs

Average Tenure

Experienced Management: STN's management team is considered experienced (2 years average tenure).


Board Age and Tenure

3.1yrs

Average Tenure

65.5yo

Average Age

Experienced Board: STN's board of directors are considered experienced (3.1 years average tenure).


Insider Trading

Insider Buying: STN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$99,98011 Dec 19
Theresa B. Jang
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,768
Max PriceCA$36.12
BuyCA$12,46903 Oct 19
Shelley Ann Brown
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares426
Max PriceCA$29.27
BuyCA$14,36802 Oct 19
Susan Hartman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares489
Max PriceCA$29.38
BuyCA$15,01402 Oct 19
Douglas Ammerman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares511
Max PriceCA$29.38
SellCA$38,89523 Aug 19
Jeffrey Stone
EntityIndividual
Shares1,360
Max PriceCA$28.60
BuyCA$42,82515 Aug 19
Theresa B. Jang
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares1,500
Max PriceCA$28.55
BuyCA$12,37903 Jul 19
Shelley Ann Brown
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares390
Max PriceCA$31.74
BuyCA$14,07003 Jul 19
Susan Hartman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares440
Max PriceCA$31.98
BuyCA$14,07003 Jul 19
Douglas Ammerman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares440
Max PriceCA$31.98
BuyCA$85,58123 May 19
Catherine Schefer
EntityIndividual
Shares2,590
Max PriceCA$33.04
BuyCA$11,83102 Apr 19
Shelley Ann Brown
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares368
Max PriceCA$32.15
BuyCA$13,20702 Apr 19
Susan Hartman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares410
Max PriceCA$32.21
BuyCA$13,20702 Apr 19
Douglas Ammerman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares410
Max PriceCA$32.21
BuyCA$134,57128 Mar 19
Scott Murray
EntityIndividual
Role
Chief Operating Officer
Executive VP & COO
Shares4,250
Max PriceCA$31.66
BuyCA$31,96521 Mar 19
Michael Kennedy
EntityIndividual
Shares1,000
Max PriceCA$31.96
BuyCA$7,84809 Jan 19
Valentino DiManno
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Business Officer
Shares250
Max PriceCA$31.39
BuyCA$12,86802 Jan 19
Douglas Ammerman
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares430
Max PriceCA$29.93
BuyCA$13,38902 Jan 19
Shelley Ann Brown
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares446
Max PriceCA$30.02
BuyCA$12,86802 Jan 19
Susan Hartman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares430
Max PriceCA$29.93
BuyCA$29,49722 Dec 18
Valentino DiManno
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Business Officer
Shares1,000
Max PriceCA$29.50

Ownership Breakdown

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


Management Team

  • Theresa Jang (54yo)

    Executive VP & CFO

    • Tenure: 0.9yrs
  • Jan Mulligan

    Senior Vice President of Finance & Treasury

    • Tenure: 0yrs
  • Tino DiManno

    Executive VP & Chief Business Officer

    • Tenure: 14.9yrs
    • Compensation: CA$1.04m
  • Emree Siaroff

    Senior VP & Chief Human Resources Officer

    • Tenure: 0.9yrs
  • Paul J. Alpern

    Senior VP

    • Tenure: 10.3yrs
  • Gord Johnston (53yo)

    President

    • Tenure: 1.9yrs
    • Compensation: CA$3.07m
  • Scott Murray

    Executive VP & COO

    • Tenure: 3.9yrs
    • Compensation: CA$1.35m
  • Steve Fleck

    Executive VP and Chief Practice & Project Officer

    • Tenure: 2.1yrs
    • Compensation: CA$953.08k
  • Alison Tucker

    Vice President of Sector Marketing & Client Development

    • Tenure: 0yrs
  • Chris McDonald

    Senior VP & Chief Information Officer

    • Tenure: 0.9yrs

Board Members

  • Delores Etter (71yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: CA$252.98k
  • Don Lowry (68yo)

    Independent Director

    • Tenure: 6.6yrs
    • Compensation: CA$243.18k
  • Richard Bradeen (62yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: CA$228.25k
  • Doug Ammerman (67yo)

    Independent Chairman of the Board

    • Tenure: 0.6yrs
    • Compensation: CA$267.93k
  • Susan Hartman (68yo)

    Independent Director

    • Tenure: 15.1yrs
    • Compensation: CA$290.24k
  • Bob Gomes (64yo)

    Director

    • Tenure: 10.6yrs
    • Compensation: CA$227.40k
  • Gord Johnston (53yo)

    President

    • Tenure: 1.9yrs
    • Compensation: CA$3.07m
  • Shelley Ann Brown

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: CA$57.72k
  • Marie-Lucie Morin (62yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: CA$231.03k

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$4.066b
  • Shares outstanding: 111.19m
  • Website: https://www.stantec.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STNTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 1994
STNNYSE (New York Stock Exchange)YesCommon SharesUSUSDMar 1994
S3ADB (Deutsche Boerse AG)YesCommon SharesDEEURMar 1994

Biography

Stantec Inc. provides professional consulting services in the area of infrastructure and facilities for clients in the public and private sectors in Canada, the United States, and internationally. It opera ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/15 23:44
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.