The Motley Fool

Value Investors: 1 Industrial Conglomerate to Own

Image source: Getty Images

Stantec (TSX:STN)(NYSE:STN) is a global design and engineering firm that collaborates across disciplines and industries to bring buildings, energy and resources, environmental, water, and infrastructure projects to life. The company provides services in engineering, architecture, environmental sciences, project management, and project economics in all phases of the project lifecycle.

In 2020, Stantec remained active internationally and gross revenue from the company’s operations was $836.4 million. The company performs work and has permanent offices in the United Kingdom, Europe, Australia, New Zealand, and the Caribbean. Each in-country project is examined to ensure that any health, safety, security, or political risks are acceptable. Each major project has an executive leadership sponsor and is formally reviewed.

Diverse business segments

Stantec offers services through five business operating units. Within each business operating unit, the company responds to the needs of clients from various sectors through several primary service offerings.

The building segment provides pre-design, design, and construction administration services in planning, sustainability, and building performance for vertical infrastructure, primarily for private sector and institutional clients. The energy segment provides industrial engineering services for private sector energy, resource, and power clients.

The environmental services segment provides planning and permitting services for private sector clients, and remediation activities for clients. The infrastructure segment provides engineering services, and the water segment provides traditional planning, engineering, design, and construction management services.

Strategic growth

Stantec has the potential to be a top global design firm that maximizes long-term, sustainable value. The company aims to grow and diversify sustainably for the benefit of clients, employees, and shareholders. The company’s diverse business model allows it to adapt to changes in market conditions by offsetting decreased demand for services in one business operating unit or geographic location with increased demand in another.

This strategy helps it mitigate risk while continuing to increase revenue and earnings. Historically, the first and fourth quarters generally have the lowest revenue generation and project activity because of holidays and weather conditions in the northern hemisphere, but the company’s diverse business model allows it to adapt to these slowdowns.

Provider of knowledge-based solutions

Stantec serves many diverse clients in the private and public sectors and aims to establish ongoing relationships with clients that are likely to produce repeat business. The company works on tens of thousands of projects for clients in hundreds of locations, thereby ensuring that it does not rely on a few large projects for revenue generation.

In consulting services, Stantec provides knowledge-based solutions through value-added professional consulting services. It offers a range of pricing structures to clients but usually provides services based on a fixed or variable-fee contract. Most assignments are acquired because of the company’s expertise and contacts while others are obtained through a competitive bidding process.

By offering integrated expertise and services across the project lifecycle, Stantec provides clients with a vast number of project solutions. This integrated approach enables the company to execute a sound operating philosophy by maintaining a world-class level of expertise, which the company supplies to clients through the strength of local offices.

If you enjoyed this article, click the link below for top market insight delivered directly to your inbox!

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.