We came across a bullish thesis on Stantec Inc. (STN) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on STN. Stantec Inc. (STN)’s share was trading at $81.31 as of Jan 24th. STN’s trailing and forward P/E were 38.09 and 23.75 respectively according to Yahoo Finance.
A team of engineers surveying a construction site in preparation for a new underground infrastructure.
Stantec Inc. (STN) represents a compelling dividend growth opportunity with a strong combination of financial stability and strategic growth. With 12 consecutive years of dividend increases and an annual growth rate of 8.37% over the past three years, the company exemplifies consistency in rewarding shareholders. Its current 0.75% yield, paired with a modest 26.36% payout ratio, leaves ample room for future hikes, making it an attractive pick for long-term investors. Backed by a $7.3 billion backlog spanning industries like water infrastructure, renewable energy, and commercial development, Stantec demonstrates a robust pipeline that ensures stable and sustainable revenue growth.
In Q3 2024, Stantec reported revenues of $1.5 billion, up 16% year-over-year, with adjusted earnings per share growing 14% to $1.30. The company’s Water and Buildings segments led the way, posting organic growth of 11.9% and 10.0%, respectively, highlighting its strength in high-demand sectors. These results underline Stantec’s operational efficiency and its ability to execute on major projects while maintaining profitability.
Founded in 1954 as a small engineering firm in Edmonton, Alberta, Stantec has grown into a global infrastructure design leader with operations in over 400 locations across six continents. This journey from humble beginnings to global prominence reflects the company’s commitment to innovation and excellence. Stantec’s ability to balance reinvestment with shareholder returns is a testament to its disciplined management.
For dividend-focused investors, Stantec’s low payout ratio combined with steady earnings growth creates a solid platform for ongoing dividend increases. These hikes not only outpace inflation but also ensure reliable income growth over time. With a diversified project portfolio, robust financial health, and a strategic emphasis on high-demand sectors, Stantec stands out as an excellent choice for those prioritizing both stability and long-term growth. Backed by a proven performance record, Stantec is truly a dividend treasure worthy of close attention.
Stantec Inc. (STN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held STN at the end of the third quarter which was 12 in the previous quarter. While we acknowledge the risk and potential of STN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than STN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.