Stantec Inc.

I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN). I bought and sold this stock between 2008 and 2011 and did not make any money. It was a non-core holding. With their new policy of dividends, this stock has become more interesting.

Since they started to pay dividends in 2012, they raised the dividend in 2013 by 7.5% and in 2014 by 12.1%. It would seem that they want to become a dividend growth stock. So what we seem to have is a low dividend yield and moderate dividend increases. The current dividend yield is 1.17. However, the 3 year median is 1.16.

The Dividend Payout Ratios are low with the DPR for EPS for 20.5% and CFPS at 13.7%. The DPR for 2015 is expected to be similar with DPR for EPS at 20.1% and for CFPS at 14.8%.

Shareholders have done well over the past 5 and 10 years as the stock has performed well since they have started to pay dividends. The 5 and 10 years total return is at 16.69% and 17.39% per year. The portion of this return attributed to capital gain is 15.87% and 16.97%. The portion of this return attributed to dividends is 0.82% and 0.42%. Dividends are low because they just started to pay them.

The outstanding shares have increased by 0.5% and 2.4% per year over the past 5 and 10 years. Growth in Revenue, Earnings and Cash Flow has all been very good. Revenue is up by 10.6% and 17.1% per year over the past 5 and 10 years. Revenue per Share is up by 10.1% and 14.36% per year over the past 5 and 10 years.

EPS is up by 37.9% and 17% per year over the past 5 and 10 years. Cash Flow per Share is up by 10.2% and 15.6% per year over the past 5 and 10 years.

The Return on Equity has been under 10% twice over the past 10 years and once over the past 5 years. The ROE for 2013 was at 16.4% and the 5 year median value was 15%. The ROE on comprehensive income was higher in 2013, but the 5 year median is a bit lower. The ROE on comprehensive income is 19.8% for 2013 and it has a 5 year median of 12.5%.

The last thing to look at is debt ratios. They are all good. The Liquidity Ratio is 1.78 for 2013 and it has a 5 year median of 1.62. The Debt Ratio is 2.15 for 2013 and it has a 5 year ratio of 2.04. The Leverage and Debt/Equity Ratios for 2013 are 1.87 and 0.87 and their 10 year median values are 1.97 and 0.97.

Sound bit for Twitter and StockTwits is: new dividend growth stock. This stock is doing quite well. They also just split the stock and this tends to give a stock some bounce. See my spreadsheet at stn.htm.

This is the first of two parts. The second part will be posted on Wednesday, December 24, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

Stantec, founded in 1954, provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics for infrastructure and facilities projects. We support public and private sector clients in a diverse range of markets, at every stage, from initial concept and financial feasibility to project completion and beyond. Their services are provided on projects around the world operating out of more than 170 locations in North America and 4 locations internationally. Its web site is here Stantec.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct. See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.