WSP Global Inc. (WSP.TO)

Global. Because government and utilities plan years ahead, likes the visibility to the steady pipeline of work even when economic growth slows. That stability shows up in results. Recently raised net revenue outlook. Strong demand across regions. High-quality compounder. Exposed to long-cycle infrastructure spending. Yield is 0.6%.

Question was on ATRL which he does not follow, so he proposed to compare

The two names he follows most closely are STN and WSP. He goes back and forth as to which he prefers. Both very well run. He wants pure engineering and construction, which are positioned where he likes in the infrastructure spend cycle. Very attractive profitability and cashflows in their services businesses. Valuations are almost identical, as are the FCF yields and growth profiles.

He might lean just slightly to STN, as it's a little bit smaller and so it has more room to grow.

We are still confident in WSP's long-term potential, and its large backlog does add some visibility to growth. Catalysts will be earnings and acquisitions. At least 15% earnings growth is expected next year. We would be comfortable holding the stock. That being said, companies like CLS, SHOP and PNG have better growth and momenutm. But they are also (much) more volatile. We think the banks are fine, but we would not expect the same degree of returns as they have had this year. We would make any decision here on sector allocations, rather than a straight-up swap which could change the risk of a portfolio. If another sector is under-represented we would be OK with a switch for portfolio management purposes, but we would still not view WSP as a SELL. 
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We would be comfortable buying today, being more aggressive below $230.
Unlock Premium - Try 5i Free  

We would be comfortable buying today, being more aggressive below $230.
Unlock Premium - Try 5i Free  

We would be comfortable buying today, being more aggressive below $230.
Unlock Premium - Try 5i Free  

In very stable jurisdictions globally. Engineering expertise in water, environmental services, transportation, and power -- everywhere the globe needs to invest. Earnings CAGR of 20% over last 5 years. Strategic plan out to 2027, and it can handle that. Yield is 0.55%.

Doesn't know why it's down 3.6% today. WSP is extremely well managed, therefore commands a premium valuation.

Sector should have some growth with planned infrastructure spending. In the space, he prefers larger companies like this one in terms of safety, especially as we don't know which way the economy's going to go in the next couple of years. Large companies also have a global footprint, so US tariffs are not as much a concern.

His choice in the space. About 23% compounded annual shareholder return over last decade. Bigger than peers, more global, in better verticals. Into water and environmental remediation -- things with faster growth curve. Serial acquirer.

Likes the sector, which is growing. Strategic acquisitions at good prices. Just bought a company in Europe to expand presence there. 

High-quality company in a high-quality part of the value chain. Valuation is the only sticking point. Expect them to buy more of their competitors and integrate them well. Good core, long-term holding. Pick your spots.

Attractive name. Global. Pure design, before projects are even built. Valuation's come down dramatically, around 27x PE. Not dirt cheap, but fair price for a very well run company. Highly acquisitive. Backed by 2 largest pension plans in Quebec, so lots of firepower.

A Canadian company exporting services around the world. Are not that effected by the tariffs directly. Shares are down because they work with companies where steel costs are rising, so these projects will be more expensive and compress their margins. If there is infrastructure spending around the world, WSP will definitely benefit. The 5-year chart is exceptional, fairly directionally up. He owns Stantec instead (more US and water exposure), but both companies are worth owning.

Trading sideways. Fundamentals score 10/10. Upside of ~19%. Not a huge dividend.