STANTEC INC (STN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:STN - CA85472N1096 - Common Stock
137.56 CAD
-2.59 (-1.85%)
STN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 growing strongly while it is still valued neutral. This is a good combination! These ratings would make STN suitable for growth investing!
1. Profitability
1.1 Basic Checks
- STN had positive earnings in the past year.
- In the past year STN had a positive cash flow from operations.
- STN had positive earnings in each of the past 5 years.
- Each year in the past 5 years STN had a positive operating cash flow.
1.2 Ratios
- STN has a better Return On Assets (5.95%) than 66.67% of its industry peers.
- STN's Return On Equity of 14.97% is in line compared to the rest of the industry. STN outperforms 55.56% of its industry peers.
- STN has a Return On Invested Capital of 9.44%. This is in the better half of the industry: STN outperforms 66.67% 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 3 year average ROIC (8.26%) for STN is below the current ROIC(9.44%), indicating increased profibility in the last year.
| 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
- Looking at the Profit Margin, with a value of 7.63%, STN is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
- In the last couple of years the Profit Margin of STN has grown nicely.
- STN has a Operating Margin of 11.23%. This is amongst the best in the industry. STN outperforms 100.00% of its industry peers.
- STN's Operating Margin has improved in the last couple of years.
- STN's Gross Margin of 54.46% is amongst the best of the industry. STN outperforms 88.89% of its industry peers.
- STN's Gross Margin has been stable in the last couple of years.
| 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 just above the Cost of Capital (WACC), so STN is still creating some value.
- Compared to 1 year ago, STN has about the same amount of shares outstanding.
- The number of shares outstanding for STN has been increased compared to 5 years ago.
- Compared to 1 year ago, STN has an improved debt to assets ratio.
2.2 Solvency
- STN has an Altman-Z score of 3.38. This indicates that STN is financially healthy and has little risk of bankruptcy at the moment.
- STN has a better Altman-Z score (3.38) than 66.67% 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.
- The Debt to FCF ratio of STN (3.36) is better than 77.78% of its industry peers.
- A Debt/Equity ratio of 0.72 indicates that STN is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.72, STN is in line with its industry, outperforming 44.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 3.36 | ||
| Altman-Z | 3.38 |
ROIC/WACC1.03
WACC9.16%
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 77.78% 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's Quick ratio of 1.27 is amongst the best of the industry. STN outperforms 88.89% 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.
- The Earnings Per Share has been growing by 17.12% on average over the past years. This is quite good.
- The Revenue has grown by 12.49% in the past year. This is quite good.
- Measured over the past years, STN shows a quite strong growth in Revenue. The Revenue has been growing by 9.59% on average per year.
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
- Based on estimates for the next years, STN will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.33% on average per year.
- STN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.23% yearly.
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
- 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.
- 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
- Based on the Price/Earnings ratio of 26.66, the valuation of STN can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of STN indicates a somewhat cheap valuation: STN is cheaper than 77.78% of the companies listed in the same industry.
- STN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 22.56, the valuation of STN can be described as rather expensive.
- STN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. STN is cheaper than 66.67% 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 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.66 | ||
| Fwd PE | 22.56 |
4.2 Price Multiples
- STN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. STN is cheaper than 66.67% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, STN is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.49 | ||
| EV/EBITDA | 17.43 |
4.3 Compensation for Growth
- STN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of STN may justify a higher PE ratio.
- A more expensive valuation may be justified as STN's earnings are expected to grow with 15.33% in the coming years.
PEG (NY)1.31
PEG (5Y)1.56
EPS Next 2Y17.31%
EPS Next 3Y15.33%
5. Dividend
5.1 Amount
- STN has a yearly dividend return of 0.64%, which is pretty low.
- STN's Dividend Yield is a higher than the industry average which is at 0.90.
- Compared to an average S&P500 Dividend Yield of 1.81, STN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
- On average, the dividend of STN grows each year by 7.51%, which is quite nice.
- 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
- STN pays out 20.52% of its income as dividend. This is a 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 4 / 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 26.66 and the Price/Book (PB) ratio is 4.86.
How financially healthy is STANTEC INC?
The financial health rating of STANTEC INC (STN.CA) is 6 / 10.