- Stantec (TSX:STN) is a key “picks-and-shovels” player in water scarcity, designing and enabling critical infrastructure (water systems, wastewater, climate resilience) rather than supplying water directly
- The company is delivering strong, broad-based growth, with record 2025 results (revenue +10.7 per cent, adjusted EPS +19.9 per cent) and particularly strong momentum in its Water segment, which is outperforming the rest of the business
- Sustainability is embedded in its business model, with 68 per cent of revenue tied to UN Sustainable Development Goals and a global project portfolio directly addressing climate, water access, and environmental restoration
- Stantec stock (TSX:STN) last traded at C$114.00
How a design and engineering firm sits at the centre of the global water challenge
The story has already been bubbling in the headlines – water demand expected to grow by 400 billion cubic metres per year, while Metro Vancouver (the home to this very website) is running out of drinking water.
As water scarcity shifts from a regional concern to a structural global risk, investors are increasingly looking beyond utilities and desalination providers to a broader ecosystem of companies enabling water resilience. Among them, Stantec (TSX:STN) stands out—not as a water supplier, but as a key architect of the systems, infrastructure, and environmental solutions that make modern water management possible.
The Edmonton-based firm, a global leader in sustainable design and engineering, has quietly positioned itself as a “picks-and-shovels” provider in one of the most critical investment themes of the coming decades. Its latest financial results underscore how that positioning is translating into tangible growth.
This article is a journalistic opinion piece that has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Engineering the backbone of water resilience
Unlike regulated utilities that deliver water directly to households, Stantec operates upstream in the value chain. It designs and advises on everything from municipal water systems and wastewater treatment plants to flood defences, ecosystem restoration, and climate adaptation projects.
This distinction is central to its investment thesis. While utilities benefit from predictable demand and regulated returns, Stantec’s growth is tied to capital spending cycles—government infrastructure programs, climate adaptation investment, and private sector demand for resilient systems.
That demand is accelerating. Aging infrastructure, tightening environmental regulations, and increasingly severe drought conditions are pushing governments to invest heavily in water systems. In this context, firms like Stantec—alongside peers such as Tetra Tech or Jacobs Solutions—play a critical enabling role: they don’t own water, but they design the systems that make it usable, sustainable, and resilient.
A record year reflecting structural demand
Stantec’s 2025 results provide a clear snapshot of that momentum.
The company reported net revenue of C$6.5 billion, up 10.7 per cent year over year, driven by both organic growth (5.0 per cent) and acquisitions (3.9 per cent). Just as notable was the improvement in profitability: adjusted EBITDA rose 16.7 per cent to C$1.14 billion, with margins reaching 17.6 per cent—hitting the company’s strategic target range a full year ahead of schedule.
EPS growth has been even more pronounced. Diluted EPS reached C$4.20, while adjusted EPS climbed nearly 20 per cent to C$5.30, reflecting both operational discipline and scale efficiencies.
The fourth quarter reinforced this trajectory. Net revenue rose 10.9 per cent to C$1.6 billion, with organic growth across all business units. The Water segment stood out particularly, posting 10.1 per cent organic growth, highlighting its importance as a core driver of the business.
Profitability continued to expand, with quarterly adjusted EBITDA of C$283.5 million and a margin of 17.3 per cent. Adjusted EPS increased 12.6 per cent year over year.
Investors will have an even more up-to-date picture of its business when the company releses its Q1 2026 financial results on Thursday, May 14, 2026, at 7:00 AM Mountain Time (9:00 AM Eastern Time)
Water as a growth engine
The performance of Stantec’s Water business is not incidental—it is increasingly central to the company’s growth narrative.
Across its global footprint, water-related work spans:
- Municipal drinking water systems
- Wastewater treatment and reuse
- Flood protection and stormwater infrastructure
- Watershed restoration and environmental remediation
In 2025, the Water segment’s organic growth exceeded the corporate average, driven by rising project demand across North America and international markets. Management expects this trend to continue, citing strong activity under its global asset management programs and long-term frameworks.
The company’s backlog reinforces that view. Contract backlog reached C$8.6 billion, up 9.5 per cent year over year, representing roughly 13 months of work—a solid indicator of sustained demand visibility.
Discipline, scale, and margin expansion
While revenue growth has been robust, Stantec’s margin expansion may be more significant from an investor perspective.
Adjusted EBITDA margin improved by 90 basis points in 2025 to 17.6 per cent, driven largely by:
- Lower administrative and marketing costs as a percentage of revenue
- Higher utilization rates
- Improved project execution
The company’s real estate optimization strategy also contributed, reducing its footprint by 11 per cent relative to 2023 and generating incremental EPS savings.
Looking ahead, Stantec expects margins to continue expanding, guiding to a 17.6 per cent to 18.2 per cent range in 2026, alongside revenue growth of 8.5 per cent to 11.5 per cent.
This combination—mid-to-high single-digit organic growth and expanding margins—positions the firm closer to a higher-quality industrial profile than a traditional consulting business.
Sustainability as strategy, not branding
Stantec’s role in addressing global water challenges is closely tied to its broader sustainability strategy, which is increasingly integrated into its financial and operational framework.
The company’s 19th annual Sustainability Report highlights how deeply this integration runs. In 2025:
- CC$5.5 billion (68 per cent) of gross revenue was tied to projects aligned with the United Nations Sustainable Development Goals, up from 43 per cent in 2019
- The company achieved operational carbon neutrality for the fourth consecutive year
- It maintained an A- rating from the Carbon Disclosure Project, reflecting consistent climate performance
Importantly, these are not abstract metrics. Stantec’s project portfolio illustrates how sustainability translates into real-world impact:
- In Québec, it helped enable one of the world’s first carbon-neutral ceramic manufacturing facilities, reducing emissions by roughly 9,000 tonnes annually
- In the U.S. Klamath Basin, it is restoring ecosystems and reconnecting over 400 miles of salmon habitat
- In Egypt, it is supporting wastewater treatment expansion benefiting approximately 700,000 people
- In New Zealand, it is contributing to long-term resilience planning after severe flood damage
These projects underscore the company’s positioning at the intersection of infrastructure, sustainability, and climate adaptation.
The investment case in a scarcity-driven world
For investors focused on water scarcity, Stantec offers a different kind of exposure.
Rather than betting on water prices or utility rate structures, it provides leverage to:
- Infrastructure investment cycles
- Climate adaptation spending
- Environmental regulation and compliance
- Global urbanization and resource strain
This positioning comes with trade-offs. The business is more cyclical than utilities and depends on project pipelines and government budgets. However, it also offers greater growth potential, especially as large-scale infrastructure programs accelerate globally.
Stantec’s 2025 performance suggests it is navigating that balance effectively—combining consistent demand with improving margins and a growing backlog.
An enabler of a defining theme
Water scarcity is increasingly shaping investment narratives, but the companies enabling solutions often receive less attention than those delivering the resource itself.
Stantec sits firmly in that enabling category. Its work is less visible—but fundamental. From designing treatment plants to restoring watersheds, it provides the infrastructure framework within which water systems operate.
As governments and industries scale up efforts to manage water stress, firms like Stantec are likely to remain central participants. For investors, that makes it not just a sustainability story, but a long-duration infrastructure play tied to one of the most persistent challenges of the 21st century.
Stantec Inc. is a provider of comprehensive professional services in the area of infrastructure and facilities for clients in the public and private sectors. The company’s segments are Canada, United States and global. The segments provide professional consulting in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management and project economics services.
Stantec Inc. last traded at C$114.00 and has lost more than 10 per cent since this time last year.
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