DB:S3A

Stock Analysis Report

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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.


Snowflake Analysis

Mediocre balance sheet with limited growth.


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: S3A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.3%

S3A

3.0%

DE Professional Services

3.0%

DE Market


1 Year Return

30.9%

S3A

0.3%

DE Professional Services

0.2%

DE Market

Return vs Industry: S3A exceeded the German Professional Services industry which returned 0.3% over the past year.

Return vs Market: S3A exceeded the German Market which returned 0.2% over the past year.


Shareholder returns

S3AIndustryMarket
7 Day2.3%3.0%3.0%
30 Day-2.2%6.5%5.4%
90 Day-0.7%-2.1%-1.2%
1 Year33.3%30.9%2.5%0.3%1.8%0.2%
3 Year37.3%30.5%21.5%12.1%-7.2%-14.3%
5 Year16.0%7.2%67.5%45.9%4.3%-9.1%

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

No news available

Valuation

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

25.9x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: S3A (€26.8) is trading above our estimate of fair value (€24.4)

Significantly Below Fair Value: S3A is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: S3A is poor value based on its PE Ratio (25.9x) compared to the Professional Services industry average (17.9x).

PE vs Market: S3A is poor value based on its PE Ratio (25.9x) compared to the German market (19.3x).


Price to Earnings Growth Ratio

PEG Ratio: S3A is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: S3A is overvalued based on its PB Ratio (2.3x) compared to the XE Professional Services industry average (1.9x).


Next Steps

Future Growth

How is Stantec forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

20.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: S3A's forecast earnings growth (20.8% per year) is above the savings rate (0.2%).

Earnings vs Market: S3A's earnings (20.8% per year) are forecast to grow slower than the German market (21.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: S3A's revenue (4.4% per year) is forecast to grow slower than the German market (5.8% per year).

High Growth Revenue: S3A's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: S3A's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has Stantec performed over the past 5 years?

4.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: S3A has high quality earnings.

Growing Profit Margin: S3A's current net profit margins (4.8%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: S3A's earnings have grown by 4.7% per year over the past 5 years.

Accelerating Growth: S3A's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: S3A had negative earnings growth (-0.3%) over the past year, making it difficult to compare to the Professional Services industry average (-2.6%).


Return on Equity

High ROE: S3A's Return on Equity (8.9%) is considered low.


Next Steps

Financial Health

How is Stantec's financial position?


Financial Position Analysis

Short Term Liabilities: S3A's short term assets (CA$1.6B) exceed its short term liabilities (CA$924.0M).

Long Term Liabilities: S3A'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: S3A's debt to equity ratio (45.6%) is considered high.

Reducing Debt: S3A's debt to equity ratio has increased from 38.1% to 45.6% over the past 5 years.

Debt Coverage: S3A's debt is well covered by operating cash flow (54.7%).

Interest Coverage: S3A's interest payments on its debt are well covered by EBIT (5.1x coverage).


Balance Sheet


Next Steps

Dividend

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

1.49%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: S3A's dividend (1.49%) is higher than the bottom 25% of dividend payers in the German market (1.28%).

High Dividend: S3A's dividend (1.49%) is low compared to the top 25% of dividend payers in the German market (3.93%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, S3A has been paying a dividend for less than 10 years.

Growing Dividend: S3A'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 (36.7%), S3A's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Gord Johnston (53yo)

2.33yrs

Tenure

CA$3,498,660

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 ($USD2.53M) is about average for companies of similar size in the German market ($USD2.36M).

Compensation vs Earnings: Gord's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gordon Johnston
President2.33yrsCA$3.50m0.047% CA$1.4m
Theresa B. Jang
Executive VP & CFO1.33yrsCA$1.22m0.010% CA$311.3k
Valentino DiManno
Executive VP & Chief Business Officer15.33yrsCA$1.16m0.034% CA$1.0m
Steve Fleck
Executive VP and Chief Practice & Project Officer2.42yrsCA$1.16m0.014% CA$424.9k
Catherine Schefer
Executive VP & COO of Global0.33yrno data0.0065% CA$195.9k
Chris McDonald
Senior VP & Chief Information Officer1.33yrsno datano data
Paul J. Alpern
Senior VP10.42yrsno data0.019% CA$577.3k
Alison Tucker
Vice President of Sector Marketing & Client Developmentno datano datano data
Emree Siaroff
Senior VP & Chief Human Resources Officer0.33yrno data0.0028% CA$83.2k
Janet Mulligan
Senior Vice President of Finance & Treasuryno datano datano data

1.8yrs

Average Tenure

Experienced Management: S3A's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Gordon Johnston
President2.33yrsCA$3.50m0.047% CA$1.4m
Donald Lowry
Independent Director7yrsCA$239.17k0.020% CA$604.5k
Richard Bradeen
Independent Director2.17yrsCA$222.06k0.00090% CA$27.1k
Douglas Ammerman
Independent Chairman of the Board1yrCA$314.97k0.029% CA$866.0k
Patricia Galloway
Independent Directorno datano data0.0011% CA$33.4k
Robert Gomes
Director11yrsCA$222.07k0.18% CA$5.3m
Shelley Ann Brown
Independent Director1.42yrsCA$229.74k0.0021% CA$63.0k
Marie-Lucie Morin
Independent Director3.42yrsCA$235.00kno data

2.3yrs

Average Tenure

62yo

Average Age

Experienced Board: S3A's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: S3A insiders have sold more shares than they have bought 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: S3A
  • Exchange: DB
  • Founded: 1954
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: CA$4.625b
  • Listing Market Cap: CA$3.013b
  • Shares outstanding: 111.17m
  • 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 operates through three segments: Consulting Services – Canada, Consulting Services – United States, and Consulting Services – Global. The company offers consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management and planning, and project economics. It also offers water, transportation, and public works; transportation planning and traffic engineering; and resource assessment, mine development, reclamation, hydrology, and geotechnical and infrastructure engineering services, as well as urban planning, traffic assessments and optimization, environmental impact assessments, and public consultation services. In addition, the company provides structural, mechanical, electrical, plumbing, and hydraulics engineering services. It serves urban regeneration, infrastructure, education, energy, industrial, building, tourism and leisure, and waste and water sectors, as well as office and commercial, residential, and retail and town centers. The company was formerly known as Stanley Technology Group Inc. and changed its name to Stantec Inc. in October 1998. Stantec Inc. was founded in 1954 and is headquartered in Edmonton, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/31 09:42
End of Day Share Price2020/05/29 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.