Stantec Inc (STN.TO)

He has WSP-T in this sector and he prefers it. You will get a rally with the market. This stock has gone sideways for a long time.

It is a Canadian Engineering company. Last year it bought a highly sought-after water company. He has had a number of holdings in the water industry. The acquisition inherited some cost overruns on the company and are slowly getting over them. They will slowly move on. They have raised their dividend every year. (Analysts’ target: $36.31).

(A Top Pick May 1/17, Down 8%) The governments have talked about all the infrastructure spending but we are waiting for it all to come. We are talking about it being deployed.

The problem with infrastucture companies is that projects are bid on in advance, so the company loses some money that's no recoverable. The sector looks good. There's a lot of activity in Canada and especially the U.S. which should pick up. Stantic has been flat, but should get back into the groove. Solid but hold it.

Their earnings were out yesterday, and he still needs to analyze that. Trading at 17 times vs peers 18 times. Much of their higher costs were due to the recent integration they had. A 2017 story. A fine name you could continue holding here.

Good performer in their space, but these companies can win contracts whereas the ability to make money off those contracts is up for grabs. Construction is a tough business to make money. He's not in any company in this infrastructure space.

He is trying to find companies that are trading at fairly low multiples. This is trading at roughly 13X earnings out to 2020. If Mr. Trump puts through an infrastructure bill, this company is in a situation where they can take advantage of it. Through acquisitions they’ve upped their environmental capabilities as well as US exposure. You get a dividend growth of roughly 10% a year. Dividend yield of 1.43%. (Analysts' price target is $39.45.)

Likes the infrastructure aspect, and expects to see increased infrastructure on both sides of the border. Stabilizing commodity prices are going to help. They bought a global water platform, and thinks they will be able to cross sell. This has struggled for the last couple of years, and thinks it is starting to break out. He models 20% EPS growth over the next couple of years. Trades at about 18X versus its peers of 21X, versus its five-year average of around 21X. Dividend yield of 1.4%.

This has been really beaten up and lagging its competitors. Some exposure to the oil/gas industry, being Edmonton-based, put some stigma around it. It’s the 3rd largest design firm in North America. Thinks a lot of headwinds they’ve been seeing are behind them now. 5% free cash flow yield. Dividend yield of 1.4%. (Analysts' price target is $39.50.)

(A Top Pick Nov 25/16. Down 1%.) Still likes this. One of the cheaper names in engineering services. Made a big purchase of a water infrastructure company, which are really big-ticket projects. They still have the infrastructure theme coming from Canadian governments as well as potential from the US.

One of the very, very few that it is trying to break out through its all-time highs at $40. He would need to see it going higher before he would be a buyer. If he owned it, he would Sell it.

An engineering type company. The yield is reasonably low, but well covered. It’s a very competitive business. They do some business in the US which is good. An okay company, but he wouldn’t buy it personally. 1.5% dividend yield.

He prefers a Top Pick today in this space. This is a great pick in the Canadian space. It is probably a hold and has been for years. It is fine. It is an area he wants to be in but he has a cheaper idea in his Top Picks

(A Past Pick Nov 14/16. Up 8%.) Still in a turnaround situation. The last quarter was good, but the previous three quarters were not. They are moving aggressively into environmental engineering and water management. Just made an acquisition that covers California and Western US. This is currently at a decent value, and he is continuing to buy it.

This has done well, but hasn’t done anything for a while. There are willing sellers on top and willing buyers at the bottom. He would use the rally to take profits.