Stantec Inc (NYSE: STN)

Sector: Industrials Industry: Engineering & Construction CIK: 0001131383
P/B 4.55
P/E 30.41
P/S 2.32
Market Cap 10.65 Bn
ROIC (Qtr) 13.22
Div Yield % 0.50
Rev 1y % (Qtr) 10.22
Total Debt (Qtr) 1.96 Bn
Debt/Equity (Qtr) 0.84

About

Stock Price Chart

Analysis

Pros

  • Operating cash flow of 621.30M provides strong 19.14x coverage of stock compensation 32.46M, indicating sustainable incentive practices.
  • Robust free cash flow of 583.26M exceeds capital expenditure of 38.04M by 15.33x, indicating strong organic growth funding capability.
  • Tangible assets of 3.09B provide exceptional 7.89x coverage of deferred revenue 392.32M, showing strong service capability backing.
  • Free cash flow of 583.26M provides exceptional 8.30x coverage of interest expense 70.29M, showing strong debt service ability.
  • Robust tangible asset base of 3.09B provides 6.88x coverage of working capital 449.42M, indicating strong operational backing.

Cons

  • Operating cash flow of 621.30M barely covers its investment activities of (370.65M), with a coverage ratio of -1.68, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 621.30M provides thin coverage of dividend payments of (71.88M) with a -8.64 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 261.96M provide limited coverage of acquisition spending of (328.91M), which is -0.80x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 529.71M show weak coverage of depreciation charges of 233.12M, with a 2.27 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 583.26M represents just -4.81x of debt issuance (121.30M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 65.02 Bn 63.86 2.39 6.02 Bn
2 FER Ferrovial SE 48.37 Bn 14.34 5.08 -
3 FIX Comfort Systems Usa Inc 34.25 Bn 40.89 4.12 0.39 Bn
4 EME EMCOR Group, Inc. 28.27 Bn 25.01 1.74 0.42 Bn
5 MTZ Mastec Inc 17.18 Bn 51.88 1.25 2.77 Bn
6 APG APi Group Corp 16.45 Bn 105.48 2.15 3.05 Bn
7 J Jacobs Solutions Inc. 16.43 Bn 56.79 1.37 2.71 Bn
8 ACM Aecom 13.10 Bn 23.31 0.81 3.23 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.40 1.60
EV to Cash from Ops. 13.23 6.21
EV to Debt 4.19 12.02
EV to EBIT 15.51 16.63
EV to EBITDA 11.01 13.11
EV to Free Cash Flow [EV/FCF] 14.09 64.21
EV to Market Cap 0.77 1.27
EV to Revenue 1.79 1.63
Price to Book Value [P/B] 4.55 5.92
Price to Earnings [P/E] 30.41 28.08

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 3.53 2.56
Dividend Payout Ratio % 15.20 17.64
Dividend per Basic Share 0.47 0.24
FCF Dividend Payout Ratio % 6.62 8.25
Interest Coverage 7.54 80.17

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 55.47 -167.27
Cash and Equivalents Growth (1y) % 35.72 637.93
Dividend Growth (1y) % -39.97 2.92
EBIAT Growth (1y) % 33.26 92.73
EBITDA Growth (1y) % 21.62 8.03
EBIT Growth (1y) % 35.67 85.41
EBT Growth (1y) % 45.24 42.19
EPS Growth (1y) % 42.46 43.98
FCF Growth (1y) % 80.61 -20.57
Gross Profit Growth (1y) % 11.39 32.55

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.57 1.14
Cash Payout Ratio 0.11 0.05
Cash Ratio 0.16 0.38
Current Ratio 1.27 1.54
Debt to Equity Ratio 0.84 0.89
Interest Cover Ratio 7.54 80.17
Times Interest Earned 7.54 80.17

Profitability

Metric Value Industry Percentile
EBITDA Margin % 16.60 0.40
EBIT Margin % 15.93 -2.30
EBT Margin % 10.01 -4.58
Gross Margin % 54.50 20.40
Net Profit Margin % 7.60 -5.95