Comparing Stantec (NYSE:STN) & The Hackett Group (NASDAQ:HCKT)

Stantec (NYSE:STN) and The Hackett Group (NASDAQ:HCKT) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Stantec	5.62%	19.03%	8.04%
The Hackett Group	5.37%	24.12%	14.34%

Earnings & Valuation

This table compares Stantec and The Hackett Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stantec	$5.47 billion	2.26	$263.82 million	$2.74	39.52
The Hackett Group	$313.86 million	1.83	$29.63 million	$0.60	34.82

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

Institutional and Insider Ownership

63.9% of Stantec shares are held by institutional investors. Comparatively, 78.1% of The Hackett Group shares are held by institutional investors. 0.5% of Stantec shares are held by insiders. Comparatively, 9.5% of The Hackett Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Stantec pays an annual dividend of $0.66 per share and has a dividend yield of 0.6%. The Hackett Group pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. Stantec pays out 24.1% of its earnings in the form of a dividend. The Hackett Group pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stantec has increased its dividend for 13 consecutive years and The Hackett Group has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Stantec and The Hackett Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stantec	0	0	7	0	3.00
The Hackett Group	0	0	3	0	3.00

The Hackett Group has a consensus target price of $29.6667, suggesting a potential upside of 42.01%. Given The Hackett Group’s higher probable upside, analysts clearly believe The Hackett Group is more favorable than Stantec.

Volatility and Risk

Stantec has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, The Hackett Group has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Summary

Stantec beats The Hackett Group on 10 of the 16 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 The Hackett Group

The Hackett Group, Inc. operates as an intellectual property-based executive advisory, strategic consulting, and digital transformation company in the United States, Europe, and internationally. The company operates through three segments: Global Strategy & Business Transformation, Oracle Solutions, and SAP Solutions. It offers Hackett Connect, an online searchable repository; best practice accelerators that provide web-based access to best practices, customized software configuration tools, and best practice process flows; advisor inquiry for access to fact-based advice on proven approaches and methods; best practice research that provides insights into the proven approaches; and peer interaction comprising member-led webcasts, annual best practice conferences, annual member forums, membership performance surveys, and client-submitted content, as well as IP-as-a-service and Hackett Institute programs. The company also provides benchmarking services that conduct studies for selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management, and shared services; and business transformation practices which help clients develop a coordinated digital transformation strategy. In addition, it offers oracle solutions that help clients to choose and deploy oracle applications that best meet their needs and objectives. Further, the company provides SAP solutions, including planning, architecture, and vendor evaluation and selection through implementation, customization, testing, and integration; post-implementation support, change and exception management, process transparency, system documentation, and end-user training; and off-shore application development, and application maintenance and support services. The company was formerly known as Answerthink, Inc. and changed its name to The Hackett Group, Inc. in 2008. The Hackett Group, Inc. was founded in 1991 and is headquartered in Miami, Florida.