Q: I’m looking at buying into one of ATRL, STN or WSP. I am struck by the low PE of ATRL vs the other 2 (5.6, 30.9 and 36.7 respectively).
I understand this is due to higher earnings this year from ATRL. Is this likely to continue or is it an anomaly?
Which would you buy today for a long-term hold?
I understand this is due to higher earnings this year from ATRL. Is this likely to continue or is it an anomaly?
Which would you buy today for a long-term hold?
5i Research Answer:
We think ATRL is fine and a bit of a tilt toward nuclear projects should help with investor interest in the name. However, the former company that ATRL operated as (SNC-Lavalin) had spotty execution over the years compared to STN and WSP, which also helps to contribute to a lower valuation. ATRL is expected to grow mid-single digits on the top line and in the 20% range for EPS. Overall, we think it looks fine. We would still tend to prefer STN and WSP though.