Stantec (NYSE:STN – Get Free Report) and Charles River Associates (NASDAQ:CRAI – Get Free Report) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.
Dividends
Stantec pays an annual dividend of $0.66 per share and has a dividend yield of 0.6%. Charles River Associates pays an annual dividend of $1.96 per share and has a dividend yield of 1.1%. Stantec pays out 24.1% of its earnings in the form of a dividend. Charles River Associates pays out 23.7% 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 and Charles River Associates has raised its dividend for 7 consecutive years. Charles River Associates is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Stantec and Charles River Associates’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Stantec | 5.62% | 19.03% | 8.04% |
| Charles River Associates | 7.93% | 25.51% | 9.12% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Stantec | $5.47 billion | 2.30 | $263.82 million | $2.74 | 40.26 |
| Charles River Associates | $687.41 million | 1.74 | $46.65 million | $8.26 | 22.01 |
Stantec has higher revenue and earnings than Charles River Associates. Charles River Associates is trading at a lower price-to-earnings ratio than Stantec, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
63.9% of Stantec shares are owned by institutional investors. Comparatively, 84.1% of Charles River Associates shares are owned by institutional investors. 0.5% of Stantec shares are owned by insiders. Comparatively, 4.7% of Charles River Associates shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Stantec has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Charles River Associates has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings for Stantec and Charles River Associates, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Stantec | 0 | 0 | 8 | 0 | 3.00 |
| Charles River Associates | 0 | 0 | 2 | 0 | 3.00 |
Charles River Associates has a consensus target price of $235.00, indicating a potential upside of 29.26%. Given Charles River Associates’ higher probable upside, analysts clearly believe Charles River Associates is more favorable than Stantec.
Summary
Charles River Associates beats Stantec on 9 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 Charles River Associates
CRA International, Inc., together with its subsidiaries, provides economic, financial, and management consulting services worldwide. It advises clients on economic and financial matters pertaining to litigation and regulatory proceedings; and guides corporations through business strategy and performance-related issues. The company also offers consulting services, including research and analysis, expert testimony, and support in litigation and regulatory proceedings in the areas of finance, accounting, economics, insurance, and forensic accounting and investigations to corporate clients and attorneys. In addition, it offers management consulting services comprising strategy development, performance improvement, corporate strategy and portfolio analysis, estimation of market demand, environmental, social and corporate governance and sustainability strategy and analysis, design and implementation of auction and bidding, new product pricing strategies, survey and market research, valuation of intellectual property and other assets, assessment of competitors’ actions, and analysis of new sources of supply. The company serves various industries, including communications and media; consumer, health, and wellness products; energy; entertainment and leisure; financial services; healthcare; life sciences; manufacturing and industries; natural resources; retail and distribution; technology; and transportation. CRA International, Inc. was incorporated in 1965 and is headquartered in Boston, Massachusetts.
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