Comparing Stantec (NYSE:STN) & Brookfield Business (NYSE:BBUC)

Brookfield Business (NYSE:BBUC) and Stantec (NYSE:STN) are both mid-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brookfield Business	$27.46 billion	0.19	-$26.00 million	($0.39)	-65.64
Stantec	$8.55 billion	0.89	$343.11 million	$3.21	21.03

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Brookfield Business and Stantec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brookfield Business	1	2	3	0	2.33
Stantec	0	2	5	0	2.71

Brookfield Business presently has a consensus price target of $39.20, suggesting a potential upside of 53.13%. Stantec has a consensus price target of $175.00, suggesting a potential upside of 159.23%. Given Stantec’s stronger consensus rating and higher probable upside, analysts plainly believe Stantec is more favorable than Brookfield Business.

Risk and Volatility

Brookfield Business has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Stantec has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Dividends

Brookfield Business pays an annual dividend of $0.25 per share and has a dividend yield of 1.0%. Stantec pays an annual dividend of $0.70 per share and has a dividend yield of 1.0%. Brookfield Business pays out -64.1% of its earnings in the form of a dividend. Stantec pays out 21.8% 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. Stantec is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brookfield Business	1.13%	2.05%	0.40%
Stantec	5.91%	19.70%	8.07%

Institutional and Insider Ownership

85.0% of Brookfield Business shares are held by institutional investors. Comparatively, 63.9% of Stantec shares are held by institutional investors. 0.5% of Stantec shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Stantec beats Brookfield Business on 13 of the 17 factors compared between the two stocks.

About Brookfield Business

Brookfield Business Corporation focuses on healthcare, construction, and wastewater services in the United States, Europe, Australia, the United Kingdom, Canada, and Brazil. It operates through three segments: Business Services, Infrastructure Services, and Industrials. The company operates 42 hospitals; offers construction services for office, residential, hospitality and leisure, social infrastructure, retail, and mixed-use properties; and provides nuclear technology services, such as fuel, maintenance services, engineering solutions, instrumentation and control systems, and manufactured components for nuclear power plants. It also engages in the collection, treatment, and distribution of water and wastewater to the residential and governmental customers. The company was incorporated in 2021 and is headquartered in New York, New York.

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.