
TSE:STN
This summary was created by AI, based on 6 opinions in the last 12 months.
Stantec Inc (STN-T) is viewed positively by various experts, primarily due to its solid growth profile and strong free cash flow generation. Concerns regarding the impact of AI on engineering firms are seen as overstated; rather, AI is expected to enhance their service capabilities. The company won a significant contract for water and wastewater infrastructure, indicating a favorable trend in environmental remediation and infrastructure spending. Analysts anticipate approximately 10% growth in both profits and dividends, positioning STN as an appealing investment with a decent yield. Comparisons with WSP highlight Stantec's potential for growth, particularly due to its smaller size, while focusing on safety in the current uncertain economic climate.
Stantec Inc (STN) stock was up 12.11% in the period; 23.03% YTD and 28.54% for one year.
On February 22, 2023, strong results for the year ended December 31, 2022, were announced: net revenue at $4.46 billion was up 22.6% over the prior year; Net income at $247 million ($2.22 per diluted share) was up 23% and adjusted EBITDA at $723.9 million was up 26%. Management remains very optimistic that a strong multi-year cycle is ahead.
In the US, significant federal funding is starting to be dispersed from a variety of Federal Acts such as the Infrastructure Investment and Jobs Act (IIJA).
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STN has staged a nice recovery, and we like it.
ARE's recent results were good, but it has had fixed-price contract issues in the past, and it is much smaller than the other two.
WSP has executed well, has a strong backlog, made good acquisitions and has a global presence.
We also like its recent forays into ESG consulting.
WSP would be our choice, even at a more expensive valuation.
We think $168 to $170 would be an attractive range.
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. US stimulus to aid growth. Expensive valuation. Strong backlog in less cyclical segments. Attractive mining acquisitions in Australia. Unlock Premium - Try 5i Free
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Robust growing backlog. Improving fundamentals. Solid growth expected for 2022. Valuations reverted to long-term average. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Has had a solid recovery and the momentum has improved with fundamentals. Expectations for next year’s revenues and earnings growth are solid. There is a lack of revenue growth recently, but its profit margins are increasing. Believes the company can continue to increase in value. Unlock Premium - Try 5i Free
Good investment in the sector. WSP management track record was better, so she chose it and doesn't need two names. Both are well-positioned in the right verticals.