AECOM vs Stantec Which Is a Smarter Choice?

AECOM and Stantec are two prominent players in the engineering and construction industry, with both companies offering a wide range of services ranging from infrastructure development to environmental consulting. While AECOM has a larger market capitalization and global reach, Stantec is known for its strong presence in the Canadian market. Investors looking to diversify their portfolio within the engineering sector may find both AECOM and Stantec stocks attractive options, each offering unique growth potential and opportunities for long-term investment success.

AECOM or Stantec?

When comparing AECOM and Stantec, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between AECOM and Stantec.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. AECOM has a dividend yield of 0.82%, while Stantec has a dividend yield of 0.74%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AECOM reports a 5-year dividend growth of 0.00% year and a payout ratio of 43.24%. On the other hand, Stantec reports a 5-year dividend growth of 6.96% year and a payout ratio of 26.84%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with AECOM P/E ratio at 57.00 and Stantec's P/E ratio at 38.72. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AECOM P/B ratio is 6.33 while Stantec's P/B ratio is 4.84.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AECOM has seen a 5-year revenue growth of -0.18%, while Stantec's is 0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AECOM's ROE at 11.40% and Stantec's ROE at 12.08%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $105.76 for AECOM and $82.22 for Stantec. Over the past year, AECOM's prices ranged from $82.23 to $115.74, with a yearly change of 40.75%. Stantec's prices fluctuated between $67.54 and $88.42, with a yearly change of 30.92%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.