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STANTEC INC (STN.CA) Stock Fundamental Analysis

TSX:STN - Toronto Stock Exchange - CA85472N1096 - Common Stock - Currency: CAD

109.41  +0.81 (+0.75%)

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to STN. STN was compared to 8 industry peers in the Construction & Engineering industry. STN scores excellent on profitability, but there are some minor concerns on its financial health. STN is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, STN could be worth investigating further for growth investing!.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year STN was profitable.
In the past year STN had a positive cash flow from operations.
STN had positive earnings in each of the past 5 years.
STN had a positive operating cash flow in each of the past 5 years.
STN.CA Yearly Net Income VS EBIT VS OCF VS FCFSTN.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M

1.2 Ratios

With an excellent Return On Assets value of 5.88%, STN belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
Looking at the Return On Equity, with a value of 14.11%, STN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.42%, STN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
STN had an Average Return On Invested Capital over the past 3 years of 7.08%. This is below the industry average of 9.72%.
The last Return On Invested Capital (9.42%) for STN is above the 3 year average (7.08%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 5.88%
ROE 14.11%
ROIC 9.42%
ROA(3y)4.55%
ROA(5y)4.36%
ROE(3y)10.95%
ROE(5y)10.42%
ROIC(3y)7.08%
ROIC(5y)7.21%
STN.CA Yearly ROA, ROE, ROICSTN.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

With an excellent Profit Margin value of 6.15%, STN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
STN's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 9.73%, STN belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
In the last couple of years the Operating Margin of STN has grown nicely.
Looking at the Gross Margin, with a value of 54.29%, STN belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
STN's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 9.73%
PM (TTM) 6.15%
GM 54.29%
OM growth 3Y2.12%
OM growth 5Y4.84%
PM growth 3Y12.08%
PM growth 5Y35.85%
GM growth 3Y1.12%
GM growth 5Y0.03%
STN.CA Yearly Profit, Operating, Gross MarginsSTN.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40 50

6

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so STN is destroying value.
Compared to 1 year ago, STN has more shares outstanding
The number of shares outstanding for STN has been increased compared to 5 years ago.
STN has a better debt/assets ratio than last year.
STN.CA Yearly Shares OutstandingSTN.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
STN.CA Yearly Total Debt VS Total AssetsSTN.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.2 Solvency

STN has an Altman-Z score of 3.48. This indicates that STN is financially healthy and has little risk of bankruptcy at the moment.
STN's Altman-Z score of 3.48 is amongst the best of the industry. STN outperforms 100.00% of its industry peers.
STN has a debt to FCF ratio of 4.85. This is a neutral value as STN would need 4.85 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 4.85, STN belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
STN has a Debt/Equity ratio of 0.71. This is a neutral value indicating STN is somewhat dependend on debt financing.
STN has a Debt to Equity ratio (0.71) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 4.85
Altman-Z 3.48
ROIC/WACC0.93
WACC10.15%
STN.CA Yearly LT Debt VS Equity VS FCFSTN.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

2.3 Liquidity

A Current Ratio of 1.39 indicates that STN should not have too much problems paying its short term obligations.
STN has a Current ratio of 1.39. This is amongst the best in the industry. STN outperforms 87.50% of its industry peers.
A Quick Ratio of 1.39 indicates that STN should not have too much problems paying its short term obligations.
STN has a Quick ratio of 1.39. This is amongst the best in the industry. STN outperforms 87.50% of its industry peers.
Industry RankSector Rank
Current Ratio 1.39
Quick Ratio 1.39
STN.CA Yearly Current Assets VS Current LiabilitesSTN.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

7

3. Growth

3.1 Past

STN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.50%, which is quite good.
The Earnings Per Share has been growing by 17.12% on average over the past years. This is quite good.
Looking at the last year, STN shows a very strong growth in Revenue. The Revenue has grown by 41.30%.
The Revenue has been growing by 8.59% on average over the past years. This is quite good.
EPS 1Y (TTM)12.5%
EPS 3Y18.17%
EPS 5Y17.12%
EPS Q2Q%14.04%
Revenue 1Y (TTM)41.3%
Revenue growth 3Y11.2%
Revenue growth 5Y8.59%
Sales Q2Q%15.8%

3.2 Future

STN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.44% yearly.
The Revenue is expected to grow by 9.80% on average over the next years. This is quite good.
EPS Next Y18.52%
EPS Next 2Y15.7%
EPS Next 3Y14.44%
EPS Next 5YN/A
Revenue Next Year15.16%
Revenue Next 2Y12.07%
Revenue Next 3Y9.8%
Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
STN.CA Yearly Revenue VS EstimatesSTN.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2B 4B 6B
STN.CA Yearly EPS VS EstimatesSTN.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4 5

6

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 26.43, STN can be considered very expensive at the moment.
Based on the Price/Earnings ratio, STN is valued a bit cheaper than 75.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.35. STN is around the same levels.
A Price/Forward Earnings ratio of 22.21 indicates a rather expensive valuation of STN.
STN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. STN is cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 95.00, STN is valued rather cheaply.
Industry RankSector Rank
PE 26.43
Fwd PE 22.21
STN.CA Price Earnings VS Forward Price EarningsSTN.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STN indicates a somewhat cheap valuation: STN is cheaper than 75.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STN indicates a rather cheap valuation: STN is cheaper than 87.50% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 25.3
EV/EBITDA 15.23
STN.CA Per share dataSTN.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40

4.3 Compensation for Growth

STN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
STN has an outstanding profitability rating, which may justify a higher PE ratio.
STN's earnings are expected to grow with 14.44% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.43
PEG (5Y)1.54
EPS Next 2Y15.7%
EPS Next 3Y14.44%

6

5. Dividend

5.1 Amount

With a yearly dividend of 0.73%, STN is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.62, STN pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.73, STN pays less dividend than the S&P500 average, which is at 2.28.
Industry RankSector Rank
Dividend Yield 0.73%

5.2 History

On average, the dividend of STN grows each year by 6.83%, which is quite nice.
STN has paid a dividend for at least 10 years, which is a reliable track record.
STN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.83%
Div Incr Years11
Div Non Decr Years11
STN.CA Yearly Dividends per shareSTN.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8

5.3 Sustainability

21.39% of the earnings are spent on dividend by STN. This is a low number and sustainable payout ratio.
STN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP21.39%
EPS Next 2Y15.7%
EPS Next 3Y14.44%
STN.CA Yearly Income VS Free CF VS DividendSTN.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M 500M
STN.CA Dividend Payout.STN.CA Dividend Payout, showing the Payout Ratio.STN.CA Dividend Payout.PayoutRetained Earnings

STANTEC INC

TSX:STN (2/5/2025, 7:00:00 PM)

109.41

+0.81 (+0.75%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)11-07 2024-11-07/amc
Earnings (Next)02-25 2025-02-25/amc
Inst Owners73.23%
Inst Owner ChangeN/A
Ins Owners0.19%
Ins Owner ChangeN/A
Market Cap12.48B
Analysts77.33
Price Target135.2 (23.57%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 0.73%
Yearly Dividend0.76
Dividend Growth(5Y)6.83%
DP21.39%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.37%
Min EPS beat(2)-0.77%
Max EPS beat(2)3.51%
EPS beat(4)2
Avg EPS beat(4)3.32%
Min EPS beat(4)-5.6%
Max EPS beat(4)16.12%
EPS beat(8)5
Avg EPS beat(8)3.86%
EPS beat(12)8
Avg EPS beat(12)3.45%
EPS beat(16)11
Avg EPS beat(16)5.75%
Revenue beat(2)0
Avg Revenue beat(2)-0.34%
Min Revenue beat(2)-0.43%
Max Revenue beat(2)-0.25%
Revenue beat(4)2
Avg Revenue beat(4)0.51%
Min Revenue beat(4)-0.43%
Max Revenue beat(4)2.55%
Revenue beat(8)6
Avg Revenue beat(8)1.54%
Revenue beat(12)8
Avg Revenue beat(12)0.66%
Revenue beat(16)8
Avg Revenue beat(16)-0.64%
PT rev (1m)0%
PT rev (3m)3.55%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-0.29%
EPS NY rev (1m)0.13%
EPS NY rev (3m)1.15%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.12%
Valuation
Industry RankSector Rank
PE 26.43
Fwd PE 22.21
P/S 1.84
P/FCF 25.3
P/OCF 20.32
P/B 4.21
P/tB N/A
EV/EBITDA 15.23
EPS(TTM)4.14
EY3.78%
EPS(NY)4.93
Fwd EY4.5%
FCF(TTM)4.32
FCFY3.95%
OCF(TTM)5.38
OCFY4.92%
SpS59.55
BVpS25.97
TBVpS-3.81
PEG (NY)1.43
PEG (5Y)1.54
Profitability
Industry RankSector Rank
ROA 5.88%
ROE 14.11%
ROCE 12.35%
ROIC 9.42%
ROICexc 9.82%
ROICexgc 28.71%
OM 9.73%
PM (TTM) 6.15%
GM 54.29%
FCFM 7.26%
ROA(3y)4.55%
ROA(5y)4.36%
ROE(3y)10.95%
ROE(5y)10.42%
ROIC(3y)7.08%
ROIC(5y)7.21%
ROICexc(3y)7.5%
ROICexc(5y)7.7%
ROICexgc(3y)21.26%
ROICexgc(5y)20.36%
ROCE(3y)9.29%
ROCE(5y)9.45%
ROICexcg growth 3Y7.61%
ROICexcg growth 5Y7.2%
ROICexc growth 3Y3.37%
ROICexc growth 5Y6.55%
OM growth 3Y2.12%
OM growth 5Y4.84%
PM growth 3Y12.08%
PM growth 5Y35.85%
GM growth 3Y1.12%
GM growth 5Y0.03%
F-Score7
Asset Turnover0.96
Health
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 4.85
Debt/EBITDA 2.19
Cap/Depr 40.48%
Cap/Sales 1.78%
Interest Coverage 7.47
Cash Conversion 64%
Profit Quality 117.99%
Current Ratio 1.39
Quick Ratio 1.39
Altman-Z 3.48
F-Score7
WACC10.15%
ROIC/WACC0.93
Cap/Depr(3y)26.76%
Cap/Depr(5y)N/A
Cap/Sales(3y)1.59%
Cap/Sales(5y)1.43%
Profit Quality(3y)134.85%
Profit Quality(5y)188.56%
High Growth Momentum
Growth
EPS 1Y (TTM)12.5%
EPS 3Y18.17%
EPS 5Y17.12%
EPS Q2Q%14.04%
EPS Next Y18.52%
EPS Next 2Y15.7%
EPS Next 3Y14.44%
EPS Next 5YN/A
Revenue 1Y (TTM)41.3%
Revenue growth 3Y11.2%
Revenue growth 5Y8.59%
Sales Q2Q%15.8%
Revenue Next Year15.16%
Revenue Next 2Y12.07%
Revenue Next 3Y9.8%
Revenue Next 5YN/A
EBIT growth 1Y42.02%
EBIT growth 3Y13.55%
EBIT growth 5Y13.85%
EBIT Next Year65.84%
EBIT Next 3Y25.69%
EBIT Next 5YN/A
FCF growth 1Y135.98%
FCF growth 3Y-8.12%
FCF growth 5Y56.17%
OCF growth 1Y132.04%
OCF growth 3Y-3.38%
OCF growth 5Y25.84%