Critical Comparison: Gartner (NYSE:IT) vs. Stantec (NYSE:STN)

Gartner (NYSE:IT) and Stantec (NYSE:STN) are both large-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Profitability

This table compares Gartner and Stantec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gartner	19.71%	82.63%	13.58%
Stantec	5.62%	19.03%	8.04%

Risk and Volatility

Gartner has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Stantec has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Insider and Institutional Ownership

91.5% of Gartner shares are held by institutional investors. Comparatively, 63.9% of Stantec shares are held by institutional investors. 2.3% of Gartner shares are held by insiders. Comparatively, 0.5% of Stantec shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Gartner and Stantec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gartner	2	6	4	0	2.17
Stantec	0	0	7	0	3.00

Gartner currently has a consensus target price of $311.67, suggesting a potential upside of 35.29%. Given Gartner’s higher possible upside, research analysts plainly believe Gartner is more favorable than Stantec.

Valuation and Earnings

This table compares Gartner and Stantec”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gartner	$6.46 billion	2.57	$1.25 billion	$11.40	20.21
Stantec	$7.99 billion	1.36	$263.82 million	$3.04	31.33

Gartner has higher earnings, but lower revenue than Stantec. Gartner is trading at a lower price-to-earnings ratio than Stantec, indicating that it is currently the more affordable of the two stocks.

Summary

Gartner beats Stantec on 10 of the 14 factors compared between the two stocks.

About Gartner

Gartner, Inc. operates as a research and advisory company in the United States, Canada, Europe, the Middle East, Africa, and internationally. It operates through three segments: Research, Conferences, and Consulting. The Research segment delivers its research primarily through a subscription service that include on-demand access to published research content, data and benchmarks, and direct access to a network of research experts. The Conferences segment offers executives and teams in an organization the opportunity to learn, share, and network. The Consulting segment offers market-leading research, custom analysis, and on-the-ground support services. This segment also offers actionable solutions for IT-related priorities, including IT cost optimization, digital transformation, and IT sourcing optimization. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut.

About Stantec

Stantec Inc. provides professional services in the areas of infrastructure and facilities to the public and private sectors in Canada, the United States, and internationally. It offers evaluation, planning, and designing infrastructure solutions; solutions for sustainable water resources, planning, management, and infrastructure; environmental services; integrated architecture, engineering, interior design, and planning solutions for buildings; and energy and resources solutions. The company also provides consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. In addition, it offers planning and design services to clients in residential, logistics, retail, infrastructure, energy, higher education, and urban regeneration sectors; architectural and interior design, and planning services in the science and technology, commercial workplace, higher education, residential, and hospitality markets. Further, the company provides transportation advisory, transport engineering, and technical design; project delivery consultancy services for mining, resources, and industrial infrastructure projects; paleontological and archaeological services for the rail, transportation, water, and power and energy sectors; and environmental and cultural resource compliance services. Additionally, it offers consulting services in sustainable building design, energy infrastructure upgrades, sustainable district heating network, and e-mobility; and planning, design, construction administration, commissioning, maintenance, decommissioning, and remediation services. The company was formerly known as Stanley Technology Group Inc. and changed its name to Stantec Inc. in October 1998. Stantec Inc. was founded in 1954 and is headquartered in Edmonton, Canada.