NYSE:SCL

Stock Analysis Report

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.

Snowflake

Fundamentals

Flawless balance sheet with acceptable track record.


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


Market Performance


7 Day Return

-0.6%

SCL

2.0%

US Chemicals

1.0%

US Market


1 Year Return

12.2%

SCL

-5.9%

US Chemicals

6.7%

US Market

Return vs Industry: SCL exceeded the US Chemicals industry which returned -5.9% over the past year.

Return vs Market: SCL exceeded the US Market which returned 6.7% over the past year.


Share holder returns

SCLIndustryMarket
7 Day-0.6%2.0%1.0%
30 Day-3.3%-2.8%-1.8%
90 Day3.8%-2.6%-1.8%
1 Year13.4%12.2%8.1%-5.9%9.1%6.7%
3 Year40.9%36.3%43.4%17.3%46.1%36.6%
5 Year121.9%108.5%46.1%14.8%66.9%48.6%

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 based on future cash flows and its price relative to the stock market?

21.48x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: SCL ($95.62) is trading above our estimate of fair value ($71.36)

Significantly Undervalued: SCL is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: SCL is poor value based on its PE Ratio (21.5x) compared to the Chemicals industry average (19.4x).

PE vs Market: SCL is poor value based on its PE Ratio (21.5x) compared to the US market (17.5x).


Price Based on Expected Growth

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


Price Based on Value of Assets

PB vs Industry: SCL is overvalued based on its PB Ratio (2.5x) compared to the US Chemicals industry average (2x).


Next Steps

Future Growth

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

12.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: SCL's forecast earnings growth (12.8% per year) is above the savings rate (2.7%).

Earnings vs Market: SCL's earnings (12.8% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: SCL's earnings are forecast to grow, but not significantly.

Revenue vs Market: SCL's revenue (4.7% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: SCL's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High 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?

11.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SCL's earnings have grown by 11.2% per year over the past 5 years.

Accelerating Growth: SCL's earnings growth over the past year (5.5%) is below its 5-year average (11.2% per year).

Earnings vs Industry: SCL earnings growth over the past year (5.5%) exceeded the Chemicals industry -2%.


Return on Equity

High ROE: SCL's Return on Equity (11.9%) is considered low.


Return on Assets

ROA vs Industry: SCL has a higher Return on Assets than the Chemicals industry average last year.


Return on Capital Employed

ROCE Improving: SCL's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Stepan's financial position?


Financial Position Analysis

Short Term Liabilities: SCL's short term assets ($806.8M) exceeds its short term liabilities ($299.5M)

Long Term Liabilities: SCL's short term assets (806.8M) exceeds its long term liabilities (371.1M)


Debt to Equity History and Analysis

Debt Level: SCL's debt to equity ratio (27.1%) is considered satisfactory

Reducing Debt: SCL's debt to equity ratio has reduced from 46.3% to 27.1% over the past 5 years.

Debt Coverage: SCL's debt is well covered by operating cash flow (84.3%).

Interest Coverage: SCL's interest payments on its debt are well covered by EBIT (16.3x coverage).


Balance Sheet

Inventory Level: SCL has a high level of physical assets or inventory.

Debt Coverage by Assets: SCL's debt is covered by short term assets (assets are 3.468090x debt).


Next Steps

Dividend

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

1.02%

Expected Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years1.0%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: SCL's dividend (1.05%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: SCL's dividend (1.05%) is low compared to the top 25% of dividend payers in the US market (3.77%).

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 (21.7%), SCL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Stepan's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

F. Stepan (58yo)

13.8yrs

Tenure

US$3,716,937

Compensation

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


CEO Compensation Analysis

Compensation vs. Market: F.'s total compensation ($USD3.72M) is about average for companies of similar size in the US market ($USD4.08M).

Compensation vs Earnings: F.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

57yo

Average Age

Experienced Management: SCL's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

7.8yrs

Average Tenure

59yo

Average Age

Experienced Board: SCL's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$8817 Sep 19
Janet Catlett
EntityIndividual
Role
Head of Human Resources
VP & Chief Human Resources Officer
Shares0.89
Max PriceUS$98.32
SellUS$231,69012 Sep 19
Frank Pacholec
EntityIndividual
Role
Head of Corporate Development
Vice President of Strategy & Corporate Development
Shares2,383
Max PriceUS$97.23
SellUS$310,82706 Sep 19
Arthur Mergner
EntityIndividual
Shares3,232.39
Max PriceUS$96.16
SellUS$47,37529 Aug 19
Debra Stefaniak
EntityIndividual
Shares500
Max PriceUS$94.75
SellUS$96,45901 Aug 19
Sean Moriarty
EntityIndividual
Shares959
Max PriceUS$100.58
SellUS$134,97829 Jul 19
Scott Behrens
EntityIndividual
Shares1,386
Max PriceUS$97.39
SellUS$177,54512 Jun 19
Frank Pacholec
EntityIndividual
Role
Head of Corporate Development
Vice President of Strategy & Corporate Development
Shares1,931
Max PriceUS$91.94
SellUS$27,79012 Jun 19
Debra Stefaniak
EntityIndividual
Shares300
Max PriceUS$92.63
SellUS$108,62012 Jun 19
Edward Wehmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,200
Max PriceUS$90.57
BuyUS$42,77028 May 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares500
Max PriceUS$85.54
BuyUS$25,99224 May 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares300
Max PriceUS$86.64
BuyUS$17,43816 May 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares200
Max PriceUS$87.19
BuyUS$22,05909 May 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares250
Max PriceUS$88.23
SellUS$200,59307 May 19
Gregory Lawton
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,201
Max PriceUS$91.14
BuyUS$22,39307 May 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares250
Max PriceUS$89.57
SellUS$179,56919 Mar 19
Scott Behrens
EntityIndividual
Shares2,000
Max PriceUS$89.78
SellUS$18,02019 Mar 19
Debra Stefaniak
EntityIndividual
Shares200
Max PriceUS$90.10
BuyUS$17,95019 Mar 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares200
Max PriceUS$89.75
BuyUS$18,17414 Mar 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares200
Max PriceUS$90.87
SellUS$182,48413 Mar 19
Scott Behrens
EntityIndividual
Shares2,000
Max PriceUS$91.24
BuyUS$9,01708 Mar 19
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares100
Max PriceUS$90.17
BuyUS$31,48818 Dec 18
Luis Rojo
EntityIndividual
Role
Chief Financial Officer
VP & CFO
Shares400
Max PriceUS$78.72
SellUS$15,97513 Dec 18
Debra Stefaniak
EntityIndividual
Shares200
Max PriceUS$79.88
SellUS$185,50409 Nov 18
Gregory Lawton
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,114
Max PriceUS$87.75
SellUS$125,62805 Nov 18
Arthur Mergner
EntityIndividual
Shares1,500
Max PriceUS$83.99
SellUS$118,87031 Oct 18
Edward Wehmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,400
Max PriceUS$84.91

Ownership Breakdown


Management Team

  • F. Stepan (58yo)

    Chairman

    • Tenure: 13.8yrs
    • Compensation: US$3.72m
  • John Venegoni (60yo)

    Consultant

    • Tenure: 5.1yrs
    • Compensation: US$1.19m
  • Frank Pacholec (63yo)

    Vice President of Strategy & Corporate Development

    • Tenure: 3.3yrs
  • Matthew Eaken (56yo)

    VP & Corporate Controller

    • Tenure: 8.8yrs
    • Compensation: US$492.25k
  • Jennifer Hale (57yo)

    Consultant

    • Tenure: 1.1yrs
    • Compensation: US$2.18m
  • Luis Rojo (46yo)

    VP & CFO

    • Tenure: 1.4yrs
    • Compensation: US$1.05m
  • David Mattingly

    VP & Chief Compliance Officer

    • Tenure: 1.8yrs
  • Janet Catlett (42yo)

    VP & Chief Human Resources Officer

    • Tenure: 1.3yrs
  • Jason Keiper

    VP & Chief Technology and Sustainability Officer

    • Tenure: 0yrs
  • David Kabbes

    VP, General Counsel & Secretary

    • Tenure: 0.8yrs

Board Members

  • Ed Wehmer (65yo)

    Lead Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$204.98k
  • Jan Reed (59yo)

    Independent Director

    • Tenure: 4yrs
    • Compensation: US$177.48k
  • F. Stepan (58yo)

    Chairman

    • Tenure: 13.8yrs
    • Compensation: US$3.72m
  • Greg Lawton (68yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$184.98k
  • Michael Boyce (71yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$179.98k
  • Joaquin Delgado (59yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: US$169.98k
  • Randy Dearth (55yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$169.98k

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$2.157b
  • Shares outstanding: 22.56m
  • Website: https://www.stepan.com

Number of Employees


Location

  • Stepan Company
  • Edens and Winnetka 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 Analysis2019/10/14 01:29
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

© 2018 SIMPLY WALL STREET PTY LTD, COMMUNITY DESIGN 2845206, US DESIGN PATENT #29/544/281, EUROPEAN DESIGN REGISTRATION #2845206, STANDARD & POOR’S FINANCIAL SERVICES LLC. ALL RIGHTS RESERVED.

Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.

Copyright © 2018, Standard & Poor’s Financial Services LLC. Reproduction of S&P Capital IQ in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Capital IQ. (2018)