STANTEC INC (STN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:STN - CA85472N1096 - Common Stock
137 CAD
-0.26 (-0.19%)
We assign a fundamental rating of 6 out of 10 to STN. STN was compared to 8 industry peers in the Construction & Engineering industry. While STN has a great profitability rating, 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! These ratings would make STN suitable for growth investing!
1. Profitability
1.1 Basic Checks
- STN had positive earnings in the past year.
- STN had a positive operating cash flow in the past year.
- Each year in the past 5 years STN has been profitable.
- In the past 5 years STN always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.95%, STN is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 14.97%, STN is in line with its industry, outperforming 50.00% of the companies in the same industry.
- STN's Return On Invested Capital of 9.44% is fine compared to the rest of the industry. STN outperforms 62.50% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for STN is significantly below the industry average of 71.07%.
- The last Return On Invested Capital (9.44%) for STN is above the 3 year average (8.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.95% | ||
| ROE | 14.97% | ||
| ROIC | 9.44% |
ROA(3y)5.02%
ROA(5y)4.56%
ROE(3y)12%
ROE(5y)10.98%
ROIC(3y)8.26%
ROIC(5y)7.69%
1.3 Margins
- With a decent Profit Margin value of 7.63%, STN is doing good in the industry, outperforming 75.00% 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 11.23%, STN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- STN's Operating Margin has improved in the last couple of years.
- STN has a Gross Margin of 54.46%. This is amongst the best in the industry. STN outperforms 87.50% of its industry peers.
- In the last couple of years the Gross Margin of STN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.23% | ||
| PM (TTM) | 7.63% | ||
| GM | 54.46% |
OM growth 3Y4.91%
OM growth 5Y1.76%
PM growth 3Y3.74%
PM growth 5Y3.3%
GM growth 3Y0.35%
GM growth 5Y0.13%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so STN is destroying value.
- STN has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, STN has more shares outstanding
- STN has a better debt/assets ratio than last year.
2.2 Solvency
- STN has an Altman-Z score of 3.37. This indicates that STN is financially healthy and has little risk of bankruptcy at the moment.
- STN has a better Altman-Z score (3.37) than 62.50% of its industry peers.
- The Debt to FCF ratio of STN is 3.36, which is a good value as it means it would take STN, 3.36 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.36, STN belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
- STN has a Debt/Equity ratio of 0.72. This is a neutral value indicating STN is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.72, STN is doing worse than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 3.36 | ||
| Altman-Z | 3.37 |
ROIC/WACC0.99
WACC9.54%
2.3 Liquidity
- STN has a Current Ratio of 1.27. This is a normal value and indicates that STN is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.27, STN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- A Quick Ratio of 1.27 indicates that STN should not have too much problems paying its short term obligations.
- STN has a better Quick ratio (1.27) than 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
- STN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.64%, which is quite impressive.
- Measured over the past years, STN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.12% on average per year.
- STN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.49%.
- The Revenue has been growing by 9.59% on average over the past years. This is quite good.
EPS 1Y (TTM)24.64%
EPS 3Y22.5%
EPS 5Y17.12%
EPS Q2Q%17.69%
Revenue 1Y (TTM)12.49%
Revenue growth 3Y17.29%
Revenue growth 5Y9.59%
Sales Q2Q%11.84%
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 15.33% yearly.
- Based on estimates for the next years, STN will show a quite strong growth in Revenue. The Revenue will grow by 9.23% on average per year.
EPS Next Y20.33%
EPS Next 2Y17.31%
EPS Next 3Y15.33%
EPS Next 5YN/A
Revenue Next Year12%
Revenue Next 2Y11%
Revenue Next 3Y9.23%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- STN is valuated quite expensively with a Price/Earnings ratio of 26.55.
- 75.00% of the companies in the same industry are more expensive than STN, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, STN is valued at the same level.
- STN is valuated rather expensively with a Price/Forward Earnings ratio of 22.47.
- Based on the Price/Forward Earnings ratio, STN is valued a bit cheaper than 62.50% of the companies in the same industry.
- STN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.55 | ||
| Fwd PE | 22.47 |
4.2 Price Multiples
- 62.50% of the companies in the same industry are more expensive than STN, based on the Enterprise Value to EBITDA ratio.
- STN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. STN is cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.42 | ||
| EV/EBITDA | 17.37 |
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 a very decent profitability rating, which may justify a higher PE ratio.
- STN's earnings are expected to grow with 15.33% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.31
PEG (5Y)1.55
EPS Next 2Y17.31%
EPS Next 3Y15.33%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.64%, STN is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.90, STN pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, STN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
- The dividend of STN is nicely growing with an annual growth rate of 7.51%!
- STN has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)7.51%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 20.52% of the earnings are spent on dividend by STN. This is a low number and sustainable payout ratio.
- The dividend of STN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP20.52%
EPS Next 2Y17.31%
EPS Next 3Y15.33%
STANTEC INC / STN.CA FAQ
Can you provide the ChartMill fundamental rating for STANTEC INC?
ChartMill assigns a fundamental rating of 6 / 10 to STN.CA.
Can you provide the valuation status for STANTEC INC?
ChartMill assigns a valuation rating of 5 / 10 to STANTEC INC (STN.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for STANTEC INC?
STANTEC INC (STN.CA) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for STN stock?
The Price/Earnings (PE) ratio for STANTEC INC (STN.CA) is 26.55 and the Price/Book (PB) ratio is 4.84.
How financially healthy is STANTEC INC?
The financial health rating of STANTEC INC (STN.CA) is 6 / 10.