If you’ve been hunting for a quality Canadian stock to anchor a retirement portfolio, Stantec (TSX: STN) deserves a closer look right now.
Valued at a market cap of $11.7 billion, Stantec stock is down 35% from its all-time high and offers a dividend yield of almost 1%. Despite its ongoing pullback, the Canadian stock has returned 250% to shareholders over the past decade, after adjusting for dividends.
Stantec is a Canada-based engineering and design firm that offers shareholders a growing dividend backed by a robust global order book. I think the recent weakness has handed long-term investors a far better entry price.
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Is the Canadian dividend stock a buy?
Stantec is not a high-yield stock. The forward dividend is roughly $0.98 a share, indicating a yield of less than 1%. However, the annual dividend has risen from $0.30 per share in 2012.
Here’s the part that matters. Stantec has raised its dividend by about 9% a year over the past decade, enhancing the yield at cost over time. A small yield that grows 8% to 9% a year, reinvested over 20 years, does a lot of heavy lifting.
The decline in Stantec stock has more to do with a stretched valuation unwinding than a broken business.
The TSX dividend stock traded at a forward price-to-earnings multiple of 28 times in early 2025. Today, its forward earnings multiple is much lower at 16.3 times, while the 10-year average stands at 19.5 times.
Analysts tracking the TSX stock forecast adjusted earnings to expand from $5.30 per share in 2025 to $8 per share in 2028. If Stantec stock reverts to its mean earnings multiple of 19.5 times, it could return more than 50% over the next 20 months.
A strong performance in Q1 of 2026
In the first quarter of 2026, Stantec grew sales by 9.1% to $1.69 billion, while the adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin improved to 16.9%.
Earnings per share of $1.33 beat estimates, while the management reaffirmed full-year guidance for net revenue growth of 8.5% to 11.5% and record margins.
Stantec keeps winning long-duration work tied to essentials like water and wastewater. In May, the firm, in a joint venture with Jacobs, was selected for Greater Western Water’s five-year infrastructure program in Melbourne, Australia.
Western Melbourne’s population is forecast to more than double by 2050, so this is a multi-year, recurring project.
Stantec is an engineering partner on Urban Utilities’s multibillion-dollar NG4D program in Queensland. It was also named preferred bidder on Scottish Water’s multibillion-pound upgrade.
At Stantec’s annual meeting in May, CEO Gord Johnston told shareholders the firm is folding artificial intelligence (AI) into both back-office tasks and client projects to lift margins.
The Foolish takeaway
I think Stantec is a buy at today’s price for a retirement portfolio. You’re getting a profitable, globally diversified consultant with a strong balance sheet, a fast-growing dividend, and years of booked infrastructure work, all at a one-third discount to its year-ago trading level.
The average analyst 12-month price target sits near $149, roughly 45% above the current price.
No stock is risk-free, and a slowdown in government or private infrastructure spending would impact top-line growth. Investors can buy a wonderful business when it’s out of favour, collect a rising dividend, and let time do the work. For a buy-and-hold retirement holding, Stantec at a 34% discount is the kind of setup Foolish investors wait years for.
