Reviewing Brookfield Business (NYSE:BBUC) & Stantec (NYSE:STN)

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

Earnings and Valuation

This table compares Stantec and Brookfield Business”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stantec	$5.83 billion	1.28	$343.11 million	$3.21	20.81
Brookfield Business	$7.17 billion	0.76	-$26.00 million	($0.39)	-68.43

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

Insider & Institutional Ownership

63.9% of Stantec shares are held by institutional investors. Comparatively, 85.0% of Brookfield Business shares are held by institutional investors. 0.5% of Stantec shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Stantec has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Brookfield Business has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Profitability

This table compares Stantec and Brookfield Business’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stantec	5.91%	19.70%	8.07%
Brookfield Business	1.13%	2.05%	0.40%

Analyst Ratings

This is a summary of recent ratings and price targets for Stantec and Brookfield Business, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stantec	0	2	5	0	2.71
Brookfield Business	1	2	3	0	2.33

Stantec presently has a consensus target price of $175.00, suggesting a potential upside of 161.99%. Brookfield Business has a consensus target price of $39.20, suggesting a potential upside of 46.89%. Given Stantec’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Stantec is more favorable than Brookfield Business.

Dividends

Stantec pays an annual dividend of $0.71 per share and has a dividend yield of 1.1%. Brookfield Business pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. Stantec pays out 22.1% of its earnings in the form of a dividend. Brookfield Business pays out -64.1% 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. Stantec has raised its dividend for 13 consecutive years. Stantec is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Stantec beats Brookfield Business on 13 of the 17 factors compared between the two stocks.

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.

About Brookfield Business

Brookfield Business Corporation focuses on healthcare, construction, and wastewater services in the United States, Europe, Australia, the United Kingdom, Canada, and Brazil. It operates through three segments: Business Services, Infrastructure Services, and Industrials. The company operates 42 hospitals; offers construction services for office, residential, hospitality and leisure, social infrastructure, retail, and mixed-use properties; and provides nuclear technology services, such as fuel, maintenance services, engineering solutions, instrumentation and control systems, and manufactured components for nuclear power plants. It also engages in the collection, treatment, and distribution of water and wastewater to the residential and governmental customers. The company was incorporated in 2021 and is headquartered in New York, New York.