Stantec Inc.

Stantec, Inc. (STN - Snapshot Report) is expanding into the active mining sector. Current growth rates are very strong and the company presents a solid value as well.

Company Description

Stantec, Inc. provides professional design and consulting services in planning, engineering, architecture, surveying, and project management. The company supports its public and private sector clients at every stage, from initial concept and financial feasibility to project completion and beyond.

Stantec is headquartered in Edmonton, Canada, has approximately 8,000 employees, and a market cap of $790 million.

Revenues Up 48%

Stantec announced its third-quarter results on Oct 30 including earnings of 51 cents per share. This was the second surprise in the last 4 quarters as analysts only estimated 21 cents per share for the company.

Gross revenue for the quarter surged 48% to C$348 million, up from C$235 one year ago. All numbers are before a $58 million impairment charge to goodwill and intangible assets. The charges are non-cash and will not impact future operations.

Mining Firm Acquired

On July 2 Stantec acquired McIntosh Engineering, a mining engineering firm. McIntosh works with some of the largest and most challenging mines all over the world. The company provides services all the way from conceptualization to construction management.

McIntosh posted C$32 million in gross revenues for 2007. The deal was part of Stantec's plan to start growing in the active mining sector.

Mining for Growth

Current full-year consensus estimates for this year and next are 22% and 24% respectively. The PEG ratio is near 0.5, which would typically be a bit low, but the industry average is just 0.6.

The Chart

After a prolonged sell off shares of STN have had a strong rebound since late October as volume has noticeably picked up. Take a look at the chart below.