Stantec (NYSE: STN) and USD Partners (NYSE:USDP) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.
Stantec pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. USD Partners pays an annual dividend of $1.36 per share and has a dividend yield of 12.8%. Stantec pays out 51.3% of its earnings in the form of a dividend. USD Partners pays out 110.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. USD Partners has raised its dividend for 4 consecutive years. USD Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Stantec and USD Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Stantec||$2.84 billion||1.12||$305.54 million||$0.78||35.71|
|USD Partners||$110.04 million||2.55||$55.88 million||$1.23||8.66|
Stantec has higher revenue and earnings than USD Partners. USD Partners is trading at a lower price-to-earnings ratio than Stantec, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Stantec and USD Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Stantec presently has a consensus target price of $32.75, indicating a potential upside of 17.59%. USD Partners has a consensus target price of $17.00, indicating a potential upside of 59.62%. Given USD Partners’ higher probable upside, analysts plainly believe USD Partners is more favorable than Stantec.
Institutional and Insider Ownership
57.0% of Stantec shares are held by institutional investors. Comparatively, 30.3% of USD Partners shares are held 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.
Risk and Volatility
Stantec has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500. Comparatively, USD Partners has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.
This table compares Stantec and USD Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
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.
About USD Partners
USD Partners LP acquires, develops and operates energy-related logistics assets, including rail terminals and other midstream infrastructure. The Company’s segments include Terminalling services and Fleet services. The Terminalling services segment consists of various operations, including Hardisty terminal, Casper terminal and Ethanol terminals. Its Hardisty terminal is an origination terminal where it loads various grades of Canadian crude oil onto railcars for transportation to end markets. The Casper terminal is a crude oil storage, blending and railcar loading terminal located in Casper, Wyoming. Its San Antonio and West Colton terminals are unit train-capable destination terminals that transload ethanol received by rail from producers onto trucks to meet local ethanol demand. The Company provides its customers with railcars and fleet services related to the transportation of liquid hydrocarbons and biofuels by rail under master fleet services agreements.
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