Comparing Stantec (NYSE:STN) & AECOM (NYSE:ACM)

AECOM (NYSE:ACM) and Stantec (NYSE:STN) are both mid-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Dividends

AECOM pays an annual dividend of $1.24 per share and has a dividend yield of 1.9%. Stantec pays an annual dividend of $0.71 per share and has a dividend yield of 0.9%. AECOM pays out 56.9% of its earnings in the form of a dividend. Stantec pays out 22.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AECOM has raised its dividend for 3 consecutive years and Stantec has raised its dividend for 13 consecutive years.

Profitability

This table compares AECOM and Stantec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AECOM	1.87%	19.72%	4.10%
Stantec	5.91%	19.70%	8.07%

Insider & Institutional Ownership

85.4% of AECOM shares are held by institutional investors. Comparatively, 63.9% of Stantec shares are held by institutional investors. 0.5% of AECOM shares are held by company insiders. Comparatively, 0.5% of Stantec shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares AECOM and Stantec”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AECOM	$15.39 billion	0.55	$561.77 million	$2.18	30.29
Stantec	$5.83 billion	1.44	$343.11 million	$3.21	23.32

AECOM has higher revenue and earnings than Stantec. Stantec is trading at a lower price-to-earnings ratio than AECOM, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

AECOM has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Stantec has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for AECOM and Stantec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AECOM	1	3	8	0	2.58
Stantec	0	2	5	0	2.71

AECOM currently has a consensus price target of $80.73, suggesting a potential upside of 22.26%. Stantec has a consensus price target of $175.00, suggesting a potential upside of 133.77%. Given Stantec’s stronger consensus rating and higher possible upside, analysts clearly believe Stantec is more favorable than AECOM.

Summary

Stantec beats AECOM on 10 of the 17 factors compared between the two stocks.

About AECOM

AECOM, together with its subsidiaries, provides professional infrastructure consulting services worldwide. It operates in three segments: Americas, International, and AECOM Capital. The company offers planning, consulting, architectural and engineering design, construction and program management, and investment and development services to public and private clients. It is also involved in the investment and development of real estate projects. In addition, the company provides construction services, including building construction and energy, and infrastructure and industrial construction. It serves transportation, water, government, facilities, environmental, and energy sectors. The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was incorporated in 1980 and is headquartered in Dallas, Texas.

About Stantec

Stantec Inc. provides professional services in the areas of infrastructure and facilities to the public and private sectors in Canada, the United States, and internationally. It offers evaluation, planning, and designing infrastructure solutions; solutions for sustainable water resources, planning, management, and infrastructure; environmental services; integrated architecture, engineering, interior design, and planning solutions for buildings; and energy and resources solutions. The company also provides consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. In addition, it offers planning and design services to clients in residential, logistics, retail, infrastructure, energy, higher education, and urban regeneration sectors; architectural and interior design, and planning services in the science and technology, commercial workplace, higher education, residential, and hospitality markets. Further, the company provides transportation advisory, transport engineering, and technical design; project delivery consultancy services for mining, resources, and industrial infrastructure projects; paleontological and archaeological services for the rail, transportation, water, and power and energy sectors; and environmental and cultural resource compliance services. Additionally, it offers consulting services in sustainable building design, energy infrastructure upgrades, sustainable district heating network, and e-mobility; and planning, design, construction administration, commissioning, maintenance, decommissioning, and remediation services. The company was formerly known as Stanley Technology Group Inc. and changed its name to Stantec Inc. in October 1998. Stantec Inc. was founded in 1954 and is headquartered in Edmonton, Canada.