Stantec Inc.

Sound bite for Twitter and StockTwits is: Div. growth Industrial. This stock has had good growth and has produced nice results for its shareholders. See my spreadsheet on Stantec Inc.

I do not own this stock of Stantec Inc. (TSX-STN, NYSE-STN), but I used to. I bought this stock in April of 2008 to make some capital gains. It was a non-dividend paying stock at that point. I lot of people were recommending it as a great stock. The reason it was recommend is that it is in the infrastructure business. There are many that think this company will profit from government money promised for infrastructure building. With their new policy of dividends, this stock has become more interesting.

The dividend yield is low and the growth is moderate. The current dividend is $1.20 based on a stock price of $34.90. The median dividend yield is 1.25%. The last dividend increase was in 2015 and it was for 13.5%. Since dividend payments started in 2012, the growth of dividends is at 9.5% per year.

Shareholders have done well. The 5 and 10 year total return to date is 21.53% and 13.92% per year. The dividend portion of this return is at 1.26% and 0.53% per year. (Dividend started in 2012.) The capital gain portion of this return is at 20.28% and 13.38% per year.

Outstanding shares have increased by 05% and 2.2% per year over the past 5 and 10 years. Shares have increased due to Stock Issues and Stock Options. Shares have decreased due to Buy Backs. Revenue, Earnings and Cash Flow growth has all been good.

Revenue has grown at 10.8% and 15.6% per year over the past 5 and 10 years. Revenue per Share has grown at 10.2% and 14% per year over the past 5 and 10 years. Analysts expect Revenue to grow by 15.6% in 2015. If you compared the 12 month period to the end of 2014 and the 12 month period to the end of the third quarter, Revenue has grown at 12.1%. So the estimate seems reasonable.

The EPS has grown by 23.3% and 15.9% per year over the past 5 and 10 years. Analysts expect the EPS to grow by 5.8% in 2015. If you compared the 12 month period to the end of 2014 and the 12 month period to the end of the third quarter, EPS has grown at 2.9%. So the estimate could be reasonable.

Cash Flow has grown by 11.7% and 15.7% over the past 5 and 10 years. CFPS has grown at 11.2% and 13.2% per year over the past 5 and 10 years. Analysts expect that the CFPS will grow by 12.3% in 2015. However, if you compared the 12 month period to the end of 2014 and the 12 month period to the end of the third quarter, Cash Flow has declined at 3.4%%. So I would wonder about the estimates given.

The Return on Equity has been less than 10% once over the past 5 years and twice over the past 10 years. The ROE for 2014 was 15.1% and the 5 year median is also 15.1%. The ROE on comprehensive income is 19.6% for 2014 and the 5 year median is 15.7%. This suggests that the earnings are of a good quality.

Another thing to like about this stock is the debt ratios which are good. The Liquidity Ratio for 2014 is $1.78. The Debt Ratio for 2014 was 2.18. Leverage and Debt/Equity Ratios for 2014 are 1.82 and 0.82.

This is the first of two parts. The second part will be posted on Monday, December 28, 2015 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 Inc.

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.

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