Quanta Services (NYSE:PWR) vs. Stantec (NYSE:STN) Financial Review

Quanta Services (NYSE:PWR) and Stantec (NYSE:STN) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Dividends

Quanta Services pays an annual dividend of $0.44 per share and has a dividend yield of 0.1%. Stantec pays an annual dividend of $0.71 per share and has a dividend yield of 0.9%. Quanta Services pays out 4.0% 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. Quanta Services has raised its dividend for 6 consecutive years and 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Quanta Services and Stantec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanta Services	3	6	23	1	2.67
Stantec	0	2	5	0	2.71

Quanta Services currently has a consensus target price of $763.81, suggesting a potential upside of 50.70%. Stantec has a consensus target price of $175.00, suggesting a potential upside of 131.33%. Given Stantec’s stronger consensus rating and higher probable upside, analysts clearly believe Stantec is more favorable than Quanta Services.

Institutional & Insider Ownership

90.5% of Quanta Services shares are held by institutional investors. Comparatively, 63.9% of Stantec shares are held by institutional investors. 0.6% of Quanta Services shares are held by insiders. Comparatively, 0.5% of Stantec shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Quanta Services has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Stantec has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Quanta Services	4.51%	23.56%	8.13%
Stantec	5.91%	19.70%	8.07%

Earnings & Valuation

This table compares Quanta Services and Stantec”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quanta Services	$37.29 billion	2.05	$1.03 billion	$11.04	45.91
Stantec	$5.83 billion	1.46	$343.11 million	$3.21	23.57

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

Summary

Quanta Services beats Stantec on 13 of the 18 factors compared between the two stocks.

About Quanta Services

Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries in the United States, Canada, Australia, and internationally. The company’s Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The company’s Renewable Energy Infrastructure Solutions segment is involved in engineering, procurement, construction, repair, and maintenance of wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The company’s Underground Utility and Infrastructure Solutions segment offers design, engineering, procurement, construction, upgrade, repair, and maintenance services for natural gas systems for gas utility customers; fabrication services for pipeline support systems and structures and facilities; and engineering and construction services for pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. The company was incorporated in 1997 and is headquartered in Houston, 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.