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Stepan Company (SCL)
NYSE:SCL
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Stepan Company
(NYSE:SCL)
65Neutral
Stepan Company (SCL) vs. S&P 500 (SPY)
Market Cap
$1.12B
Dividend Yield3.06%
Average Volume (3M)139.79K
Price to Earnings (P/E)22.6
Beta (1Y)1.10
Revenue Growth-6.26%
EPS Growth24.94%
CountryUS
Employees2,396
SectorBasic Materials
Sector Strength52
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)2.20
Shares Outstanding22,554,930
10 Day Avg. Volume128,965
30 Day Avg. Volume139,787
Financial Highlights & Ratios
PEG Ratio0.91
Price to Book (P/B)N/A
Price to Sales (P/S)0.60
Price to Cash Flow (P/CF)4.80
P/FCF Ratio3.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
Stepan Company Business Overview & Revenue Model
Company DescriptionStepan Company (SCL) is a global manufacturer of specialty and intermediate chemicals used in a wide range of industries. The company operates through three main segments: Surfactants, Polymers, and Specialty Products. These segments cater to various markets, including personal care, household cleaning, agriculture, and industrial applications. Stepan Company is known for its focus on sustainability and innovation, providing solutions that aim to enhance product performance while reducing environmental impact.
How the Company Makes MoneyStepan Company generates revenue primarily through the production and sale of specialty chemicals. The Surfactants segment, which is the largest, contributes significantly to the company's revenue by supplying ingredients used in detergents, shampoos, and other cleaning products. The Polymers segment produces polyols used in rigid foam insulation and coatings, while the Specialty Products segment offers products for food and pharmaceutical applications. The company's earnings are bolstered by strategic partnerships with key players in various industries, ongoing research and development efforts, and an emphasis on sustainable practices, which help in maintaining competitive pricing and expanding market reach.
Stepan Company Financial Statement Overview
Summary
Stepan Company exhibits a mixed financial performance. Revenue has been decreasing, but net profit margins and cash flow management show improvement. The balance sheet is stable, with rising leverage. Overall, the company has solid cash flow health but faces challenges in revenue generation and maintaining profitability margins.Income Statement
Stepan Company shows a declining revenue trend over the past few years, with total revenue decreasing from $2.77 billion in 2022 to $2.18 billion in 2024. The gross profit margin has also decreased, reflecting a potential challenge in cost management. However, the net profit margin has shown some improvement from 2023 to 2024, indicating enhanced efficiency in handling expenses. The EBIT and EBITDA margins demonstrate some stability but are not particularly strong compared to industry standards.74
Positive
Balance Sheet
The balance sheet reflects a moderate financial position with a stable equity base. The debt-to-equity ratio has increased slightly over recent years, indicating a gradual rise in leverage. The return on equity (ROE) shows some decline, reflecting a challenge in generating returns for shareholders. The equity ratio remains stable, suggesting a consistent reliance on equity financing.68
Positive
Cash Flow
The cash flow statement indicates strong operating cash flows, consistently positive over the years. There has been a significant improvement in free cash flow in 2024, driven by effective capital management. The operating cash flow to net income ratio suggests efficient cash conversion from earnings, which is a positive indicator for liquidity.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.18B | 2.33B | 2.77B | 2.35B | 1.87B | Gross Profit |
| 272.21M | 277.60M | 427.07M | 395.81M | 383.61M | EBIT |
| 70.48M | 58.61M | 105.15M | 86.61M | 92.09M | EBITDA |
| 192.10M | 169.68M | 303.96M | 265.31M | 235.72M | Net Income Common Stockholders |
| 50.37M | 40.20M | 147.15M | 137.80M | 126.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 99.67M | 129.82M | 173.75M | 159.19M | 349.94M | Total Assets |
| 2.30B | 2.36B | 2.43B | 2.07B | 1.75B | Total Debt |
| 682.83M | 712.17M | 587.14M | 322.86M | 160.81M | Net Debt |
| 583.17M | 582.35M | 413.39M | 163.68M | -189.13M | Total Liabilities |
| 1.13B | 1.15B | 1.27B | 991.42M | 763.97M | Stockholders Equity |
| 1.17B | 1.22B | 1.17B | 1.07B | 986.69M |
| Cash Flow | Free Cash Flow | |||
| 174.88M | -85.46M | -140.79M | -122.35M | 109.42M | Operating Cash Flow |
| 174.88M | 174.88M | 160.76M | 72.14M | 235.22M | Investing Cash Flow |
| -258.67M | -258.67M | -308.09M | -376.83M | -139.03M | Financing Cash Flow |
| 33.28M | 33.28M | 166.21M | 117.33M | -64.93M |
Stepan Company Technical Analysis
Negative
47.58
Price Trends
58.56
Negative
63.84
Negative
70.49
Negative
Market Momentum
-1.41
Positive
30.65
Neutral
11.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCL, the sentiment is Negative. The current price of 47.58 is below the 20-day moving average (MA) of 54.86, below the 50-day MA of 58.56, and below the 200-day MA of 70.49, indicating a bearish trend. The MACD of -1.41 indicates Positive momentum. The RSI at 30.65 is Neutral, neither overbought nor oversold. The STOCH value of 11.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCL.
Stepan Company Risk Analysis
Stepan Company disclosed 20 risk factors in its most recent earnings report. Stepan Company reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Stepan Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $1.12B | 22.62 | 4.22% | 3.06% | -6.26% | 24.94% | |
65 Neutral | $2.26B | 63.42 | 3.02% | 1.72% | -5.31% | -74.42% | |
58 Neutral | $2.53B | 24.19 | 5.10% | 3.64% | -4.29% | -74.85% | |
53 Neutral | $1.78B | 20.74 | 12.98% | 8.42% | -4.05% | ― | |
50 Neutral | $1.22B | ― | -104.11% | ― | -16.92% | -6107.70% | |
50 Neutral | $1.51B | ― | -0.51% | ― | 74.16% | -112.26% | |
47 Neutral | $2.44B | -2.84 | -22.09% | 3.51% | 4.02% | -28.91% |
* Basic Materials Sector Average
Performance Comparison
SCL
Stepan Company
47.58
-36.19
-43.20%
IOSP
Innospec
86.52
-35.94
-29.35%
OLN
Olin
19.64
-35.34
-64.28%
CC
Chemours Company
10.81
-15.10
-58.28%
NGVT
Ingevity
31.27
-15.61
-33.30%
PRM
Perimeter Solutions
9.70
2.34
31.79%
Stepan Company Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -23.38% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic achievements, such as strong growth in surfactant specialty products and successful cost reduction efforts. However, these were offset by significant challenges in the polymers segment and a noticeable decrease in earnings, influenced by one-time events and external market pressures.Highlights
Strong Performance in Surfactant Specialty Products
Surfactant Specialty Products delivered strong double-digit adjusted EBITDA growth, with global volumes growing 1%, driven by 2.5% growth in the surfactant business. The segment also saw a 10% increase in adjusted EBITDA for the quarter.
Positive Free Cash Flow
The company achieved positive free cash flow of $39 million for the year, which was in line with expectations and the operating plan.
Successful Cost Reduction Efforts
The company delivered $48 million in pretax cost out during 2024, achieved through supply chain efficiencies and workforce productivity improvements.
Strong Specialty Products Performance
Specialty product net sales increased by 10% in the quarter, with adjusted EBITDA growing by 65% due to margin recovery and volume growth.
Strategic Investments and Growth
Despite challenges, the company made strategic investments in the new Pasadena site and introduced new products in the growing spray foam market.
Lowlights
Earnings Decrease
Fourth quarter adjusted EBITDA was $35 million, down 7% year over year, and the full year adjusted EBITDA was $187 million. Adjusted net income for the fourth quarter was $2.8 million, a 63% decrease compared to the prior year.
Challenges in Polymers Segment
Polymer net sales decreased by 12% for the quarter, with selling prices down 4% and sales volume declining 9% due to sluggish demand in global rigid polyurethanes.
Impact of One-Time Events
The company faced several one-time events, including a $2.9 million tax reserve in Latin America and a $2.8 million expense related to the CEO transition, which negatively impacted earnings.
Company Guidance
During the Stepan Company's 2024 earnings call, several key financial metrics and strategic updates were shared. The company reported a fourth-quarter adjusted EBITDA of $35 million, a 7% decrease from the previous year, while the full-year adjusted EBITDA was $187 million, reflecting a 4% growth despite several one-time negative impacts. The Surfactant Specialty Products segment achieved strong double-digit adjusted EBITDA growth, counterbalancing softer demand in the Polymers segment, which experienced a 44% year-over-year decline in adjusted EBITDA. Global sales volumes grew by 1%, with the surfactant business seeing a 2.5% increase. The company also highlighted $48 million in pre-tax cost savings for 2024, primarily through improvements in supply chain and workforce productivity. Free cash flow was positive at $39 million, aligning with company expectations. Additionally, the Board declared a quarterly dividend of $0.385 per share, continuing a 57-year tradition of dividend payments. Looking ahead, the company anticipates further adjusted EBITDA improvements across all segments in 2025, driven by strategic investments, including the new Pasadena facility expected to become operational in early 2025.Stepan Company Corporate Events
Executive/Board ChangesShareholder Meetings
Edward J. Wehmer Retires from Stepan Company’s Board
Neutral
Feb 20, 2025
On February 18, 2025, Edward J. Wehmer announced his decision to retire from Stepan Company’s Board of Directors, effective from the 2025 Annual Meeting of Stockholders scheduled for April 29, 2025. Wehmer, who has been on the board since 2003 and served as Lead Independent Director since 2016, decided to retire without any disagreements with the company’s policies or practices. His retirement will lead to a reduction in the board size from eight to seven directors, with Randall S. Dearth succeeding him as Lead Independent Director. This change marks the end of Wehmer’s impactful 22-year tenure, during which he significantly contributed to the company’s growth and strategic direction.
Executive/Board Changes
Stepan Company Announces Retirement of VP David Kabbes
Neutral
Jan 29, 2025
On January 29, 2025, Stepan Company announced the upcoming retirement of David G. Kabbes, their Vice President, General Counsel, and Secretary, effective March 14, 2025. Mr. Kabbes will fulfill his current duties until his retirement and then assist in the transition for at least three months, while the company searches for his successor.
Product-Related AnnouncementsBusiness Operations and Strategy
Stepan Company Reschedules Alkoxylation Facility Launch to 2025
Neutral
Jan 27, 2025
Stepan Company announced that the startup of its new alkoxylation facility in Pasadena, Texas, is now expected in the first quarter of 2025 due to unforeseen delays. The company assured that this delay will not materially impact its first quarter results or its overall business performance and plans to provide more details during its upcoming earnings call.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.