Critical Survey: Exponent (NASDAQ:EXPO) vs. Stantec (NYSE:STN)

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

Volatility and Risk

Exponent has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Stantec has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Dividends

Exponent pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Stantec pays an annual dividend of $0.66 per share and has a dividend yield of 0.6%. Exponent pays out 60.0% of its earnings in the form of a dividend. Stantec pays out 24.1% 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. Exponent has raised its dividend for 12 consecutive years and Stantec has raised its dividend for 13 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Exponent and Stantec, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exponent	0	1	0	0	2.00
Stantec	0	0	8	0	3.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Exponent	18.35%	24.19%	13.51%
Stantec	5.62%	19.03%	8.04%

Institutional & Insider Ownership

92.4% of Exponent shares are held by institutional investors. Comparatively, 63.9% of Stantec shares are held by institutional investors. 1.6% of Exponent shares are held by company insiders. Comparatively, 0.5% of Stantec shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Exponent and Stantec”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exponent	$560.51 million	5.88	$109.00 million	$2.00	32.64
Stantec	$5.47 billion	2.28	$263.82 million	$2.74	39.96

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

Summary

Stantec beats Exponent on 9 of the 16 factors compared between the two stocks.

About Exponent

Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company in the United States and internationally. The company operates in two segments, Engineering and Other Scientific, and Environmental and Health. The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering and sciences, buildings and structures, civil engineering, construction consulting, data sciences, electrical engineering and computer science, human factors, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, thermal sciences, and vehicle engineering. The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, and health sciences. The company offers approximately 90 technical disciplines to solve pressing and complicated challenges facing stakeholders. It serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation, and other sectors of the economy. The company was formerly known as The Failure Group, Inc. and changed its name to Exponent, Inc. in 1998. The company was founded in 1967 and is headquartered in Menlo Park, California.

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.