NYSE:SCL

Stock Analysis Report

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Executive Summary

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products in North America, Europe, Latin America, and Asia. More Details

Rewards

Trading at 5.6% below our estimate of its fair value

Earnings grew by 22.9% over the past year

Risk Analysis

SCL passed our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has Stepan's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SCL is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: SCL's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

0.5%

SCL

-1.8%

US Chemicals

-4.6%

US Market


1 Year Return

37.4%

SCL

36.4%

US Chemicals

38.5%

US Market

Return vs Industry: SCL exceeded the US Chemicals industry which returned 36.4% over the past year.

Return vs Market: SCL underperformed the US Market which returned 38.5% over the past year.


Shareholder returns

SCLIndustryMarket
7 Day0.5%-1.8%-4.6%
30 Day1.8%2.4%0.6%
90 Day1.3%3.0%1.9%
1 Year38.9%37.4%39.4%36.4%41.5%38.5%
3 Year51.9%47.3%32.3%12.0%56.7%46.7%
5 Year137.7%125.5%93.2%54.5%123.5%98.6%

Long-Term Price Volatility Vs. Market

How volatile is Stepan's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Stepan undervalued compared to its fair value and its price relative to the market?

5.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SCL ($120.69) is trading below our estimate of fair value ($127.84)

Significantly Below Fair Value: SCL is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SCL is good value based on its PE Ratio (21.8x) compared to the US Chemicals industry average (26.7x).

PE vs Market: SCL is poor value based on its PE Ratio (21.8x) compared to the US market (21.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SCL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SCL is overvalued based on its PB Ratio (2.8x) compared to the US Chemicals industry average (2.5x).


Next Steps

Future Growth

How is Stepan forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

8.1%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if SCL's forecast earnings growth is above the savings rate (2%).

Earnings vs Market: Insufficient data to determine if SCL's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SCL's revenue (8.1% per year) is forecast to grow slower than the US market (10.4% per year).

High Growth Revenue: SCL's revenue (8.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SCL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Stepan performed over the past 5 years?

7.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SCL has high quality earnings.

Growing Profit Margin: SCL's current net profit margins (6.8%) are higher than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: SCL's earnings have grown by 7.2% per year over the past 5 years.

Accelerating Growth: SCL's earnings growth over the past year (22.9%) exceeds its 5-year average (7.2% per year).

Earnings vs Industry: SCL earnings growth over the past year (22.9%) exceeded the Chemicals industry -2.8%.


Return on Equity

High ROE: SCL's Return on Equity (12.9%) is considered low.


Next Steps

Financial Health

How is Stepan's financial position?


Financial Position Analysis

Short Term Liabilities: SCL's short term assets ($905.7M) exceed its short term liabilities ($416.6M).

Long Term Liabilities: SCL's short term assets ($905.7M) exceed its long term liabilities ($347.4M).


Debt to Equity History and Analysis

Debt Level: SCL's debt to equity ratio (16.1%) is considered satisfactory.

Reducing Debt: SCL's debt to equity ratio has reduced from 59.2% to 16.1% over the past 5 years.

Debt Coverage: SCL's debt is well covered by operating cash flow (142.8%).

Interest Coverage: SCL's interest payments on its debt are well covered by EBIT (31.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Stepan current dividend yield, its reliability and sustainability?

1.01%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SCL's dividend (1.01%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.34%).

High Dividend: SCL's dividend (1.01%) is low compared to the top 25% of dividend payers in the US market (3.76%).


Stability and Growth of Payments

Stable Dividend: SCL's dividends per share have been stable in the past 10 years.

Growing Dividend: SCL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.5%), SCL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCL's dividends in 3 years are forecast to be well covered by earnings (17.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

F. Stepan (59 yo)

15.08yrs

Tenure

US$4,697,426

Compensation

Mr. F. Quinn Stepan, Jr., has been the Chief Executive Officer of Stepan Company since January 1, 2006 and served as its President since February 1999 until January 01, 2021. Mr. Stepan served as a Vice Pr...


CEO Compensation Analysis

Compensation vs Market: F.'s total compensation ($USD4.70M) is about average for companies of similar size in the US market ($USD4.96M).

Compensation vs Earnings: F.'s compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
F. Stepan
Chairman & CEO15.08yrsUS$4.70m4.48%
$ 121.4m
Scott Behrens
President & COO0.083yrUS$1.29m0.078%
$ 2.1m
Luis Rojo
VP & CFO2.75yrsUS$1.27m0.035%
$ 937.4k
Jason Keiper
VP & Chief Technology and Sustainability Officer1.67yrsno data0.0066%
$ 180.0k
David Mattingly
VP & Chief Compliance Officer3.08yrsno datano data
David Kabbes
VP, General Counsel & Secretary1.58yrsno data0.014%
$ 382.5k
Mark Mydlach
Vice President of Salesno datano datano data
Janet Catlett
VP & Chief Human Resources Officer2.58yrsno data0.015%
$ 402.3k
Matthew Eaken
VP & Corporate Controller10.08yrsUS$492.25kno data
John Venegoni
Consultant6.42yrsUS$1.19mno data
Matthew Rice
Assistant Secretaryno datano datano data

2.8yrs

Average Tenure

53.5yo

Average Age

Experienced Management: SCL's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
F. Stepan
Chairman & CEO15.08yrsUS$4.70m4.48%
$ 121.4m
Edward Wehmer
Lead Independent Director4.17yrsUS$332.97k0.051%
$ 1.4m
Jan Reed
Independent Director5.33yrsUS$214.95k0.030%
$ 806.2k
Gregory Lawton
Independent Director14.83yrsUS$214.95k0.071%
$ 1.9m
Michael Boyce
Independent Director11.08yrsUS$214.95k0.068%
$ 1.8m
Joaquin Delgado
Independent Director10.08yrsUS$199.95k0.039%
$ 1.1m
Randall Dearth
Independent Director9.08yrsUS$199.95k0.046%
$ 1.3m
Lorinda Burgess
Director0.083yrno datano data

7.2yrs

Average Tenure

60yo

Average Age

Experienced Board: SCL's board of directors are considered experienced (7.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SCL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Stepan Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Stepan Company
  • Ticker: SCL
  • Exchange: NYSE
  • Founded: 1932
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$2.711b
  • Shares outstanding: 22.46m
  • Website: https://www.stepan.com

Number of Employees


Location

  • Stepan Company
  • 22 West Frontage Road
  • Northfield
  • Illinois
  • 60093
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCLNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
96SDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

Biography

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products in North America, Europe, Latin America, and A...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/02/26 23:52
End of Day Share Price2021/02/26 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.