Comparing The Shaw Group (NYSE:SHAW) and Stantec (STN)

Stantec (NYSE: STN) and The Shaw Group (NYSE:SHAW) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Institutional & Insider Ownership

54.4% of Stantec shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Stantec pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. The Shaw Group does not pay a dividend. Stantec pays out 51.9% of its earnings in the form of a dividend. The Shaw Group has increased its dividend for 5 consecutive years.

Valuation and Earnings

This table compares Stantec and The Shaw Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stantec $3.22 billion 1.00 $98.59 million $0.77 36.69
The Shaw Group N/A N/A N/A $3.25 N/A

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

Profitability

This table compares Stantec and The Shaw Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stantec 2.24% 10.69% 5.03%
The Shaw Group N/A N/A N/A

Analyst Ratings

This is a summary of current ratings and target prices for Stantec and The Shaw Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stantec 0 1 2 0 2.67
The Shaw Group 0 0 0 0 N/A

Stantec currently has a consensus target price of $40.00, suggesting a potential upside of 41.59%.

Summary

Stantec beats The Shaw Group on 7 of the 10 factors compared between the two stocks.

Stantec Company Profile

Stantec Inc. is a provider of professional services in the area of infrastructure and facilities for clients in the public and private sectors. The Company’s operates through four segments Consulting Services-Canada, Consulting Services-United States, Consulting Services-Global and Construction Services. The Company’s services include engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, construction services, project management, and project economics, from initial project concept and planning through to design, construction, commissioning, maintenance, decommissioning and remediation. The Company provides professional consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental services, project management and project economics in the area of infrastructure and facilities, principally under fee-for-service agreements with clients.

The Shaw Group Company Profile

The Shaw Group Inc. (Shaw) is a provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services to a diverse client base that includes multinational and national oil companies and industrial corporations, regulated utilities, independent and merchant power producers, and government agencies. The Company has developed and acquired intellectual property, including induction pipe bending technology and environmental decontamination technologies. Its segments include Power, Plant Services, Environmental & Infrastructure (E&I), Fabrication & Manufacturing (F&M), Energy & Chemicals (E&C) Segment, Investment in Westinghouse, and Corporate segment. Effective August 31, 2012, the Company completed the divestiture of its Energy & Chemicals business to Technip. On January 4, 2013, TOSHIBA CORP acquired a 20% stake in Westinghouse from Shaw Group Inc.

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