STANTEC INC. $69.35 - Toronto symbol STN

STANTEC INC. $69.35 (Toronto symbol STN; TSINetwork Rating: Extra Risk) (780-917-7288; www.stantec.com; Shares outstanding: 46.7 million; Market cap: $3.2 billion; Dividend yield: 1.1%) sells a range of consulting, project-delivery, design and technology services. Its clients operate in a variety of industries, including oil and gas, transportation and construction.

In the quarter ended March 31, 2014, Stantec’s revenue rose 12.7%, to $481.3 million from $426.9 million a year earlier. Acquisitions were one reason for the gain. Stantec is also working on many new projects, including major pipelines and the huge Westside Subway Transit Corridor in southern California.

Earnings gained 17.9%, to $33.5 million, or $0.72 a share, from $28.4 million, or $0.62.

The company continues to grow by acquisition, with five purchases in 2013 and another five so far this year. The 2014 purchases include California-based Processes Unlimited International, which has 450 employees in seven U.S. offices. Processes Unlimited offers engineering, project management and design services to customers in a wide range of markets.

Stantec raised its quarterly dividend by 12.1% earlier this year, to $0.185 from $0.165. It yields 1.1%.

The company cuts its costs by sharing administrative expenses, financing and employee benefits among its divisions. But continually buying new firms adds risk, including the risk of writedowns.

Stantec is a hold.

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