Updating your Cyclical-Growth Payers: Stantec

Article Excerpt

STANTEC INC. $108 is a buy. This engineering firm (Toronto symbol STN; Cyclical-Growth Payer Portfolio, Manufacturing sector; Shares outstanding: 114.1 million; Market cap: $12.3 billion; Dividend yield: 0.8%; Dividend Sustainability Rating: Above Average; www.stantec.com) is a leading seller of consulting, project-delivery, design and technology services. With the April 2024 payment, Stantec raised your quarterly dividend by 7.7%. Investors now receive $0.21 a share instead of $0.195. The new annual rate of $0.84 yields 0.8%. Stantec’s revenue in the first quarter of 2024 rose 11.5%, to $1.37 billion from $1.23 billion a year earlier. Also, earnings before unusual items gained 23.3%, to $0.90 a share (or a total of $103.0 million) from $0.73 a share (or $80.9 million). The company tends to use acquisitions to spur its growth, but it cuts related risk by targeting smaller, easy-to-absorb firms. Moreover, sharing administrative expenses, financing and employee benefits among its businesses helps lower overall costs. For example, on April 30, 2024, Stantec paid an undisclosed sum for Hydrock, a U.K.-based engineering…