Stepan Company (SCL) AI Stock Analysis

• Market Cap: $1.08B
• Dividend Yield: 3.26%
• Average Volume (3M): 165.69K
• Price to Earnings (P/E): 24.1
• Beta (1Y): 1.12
• Revenue Growth: 5.35%
• EPS Growth: -1.43%
• Country: US
• Employees: 2,396
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.48
• Shares Outstanding: 22,619,015
• 10 Day Avg. Volume: 182,793
• 30 Day Avg. Volume: 165,690
• PEG Ratio: 1.18
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 37.71
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 0.74
• Enterprise Value/Gross Profit: 6.17
• Enterprise Value/Ebitda: 8.52
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.24
• Revenue Forecast (FY): $2.35B

• Rating: 66 Neutral
• Price Target: $49.00 ▲(7.91% Upside)

Stepan Company's overall stock score reflects a balanced view of its financial performance, technical indicators, valuation, and recent earnings call insights. The company's strong cash flow and dividend yield are positive factors, but challenges in profitability and mixed technical signals temper the outlook. The focus on operational improvements and strategic growth areas is promising, but execution risks remain.

Positive Factors

Cash Flow Strength

Strong cash generation enhances financial flexibility, allowing Stepan to invest in growth opportunities and weather economic downturns.

Specialty Products Growth

Significant growth in Specialty Products indicates successful market positioning and product innovation, supporting long-term revenue expansion.

Improved Leverage Management

Better leverage management reduces financial risk and enhances the company's ability to invest in strategic initiatives.

Negative Factors

Surfactants Segment Challenges

Declining performance in the Surfactants segment could impact overall profitability and market competitiveness if not addressed.

Adjusted Net Income Decline

A sharp decline in net income affects shareholder returns and may limit reinvestment capacity, impacting long-term growth.

Oleochemical Raw Material Costs

Rising raw material costs pressure margins, potentially reducing profitability unless offset by pricing strategies or cost efficiencies.

Stepan Company Business Overview & Revenue Model

Company Description

Stepan Company (SCL) is a global manufacturer of specialty and intermediate chemicals, serving diverse markets including personal care, household and industrial cleaning, and agricultural products. The company operates through three primary segments: Surfactants, Polymers, and Specialty Products, offering a wide range of products such as surfactants, emulsifiers, and foam control agents. Stepan's commitment to innovation and sustainability is reflected in its extensive portfolio of high-performance chemicals designed to meet the evolving needs of its customers.

How the Company Makes Money

Stepan Company generates revenue primarily through the sale of its specialty and intermediate chemicals. Key revenue streams include the production and sale of surfactants, which are used in cleaning products, personal care items, and agricultural applications. The company also earns revenue from its polymers segment, which provides a variety of plastic additives and coatings. Additionally, Stepan's specialty products segment includes unique chemical formulations for various niche markets. Strategic partnerships with leading brands and manufacturers enhance its distribution capabilities and market reach, while ongoing investments in research and development enable the company to innovate and introduce new products, thereby driving further revenue growth.

Stepan Company Financial Statement Overview

Summary

Stepan Company shows a modest revenue growth and improved leverage management, but profitability remains a challenge with low net profit margins. The cash flow position is strong, indicating effective cash management.

Income Statement

Stepan Company shows a modest revenue growth rate of 1.92% in the TTM, recovering from a decline in previous years. The gross profit margin is stable at 11.94%, but the net profit margin is relatively low at 1.96%, indicating pressure on profitability. EBIT and EBITDA margins have slightly improved, suggesting operational efficiencies. However, the overall profitability remains a concern due to the low net profit margin.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.29 in the TTM, indicating better leverage management compared to previous years. Return on equity is at 3.72%, which is lower than historical levels, reflecting challenges in generating returns for shareholders. The equity ratio remains stable, suggesting a balanced capital structure. Overall, the balance sheet shows improved leverage but highlights the need for better profitability.

Cash Flow

Free cash flow has grown significantly by 61.15% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 0.15, and the free cash flow to net income ratio is 0.68, showing efficient cash conversion. The cash flow statement reflects strong cash management and improved liquidity, despite historical volatility in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.30B	2.18B	2.33B	2.77B	2.35B	1.87B
Gross Profit	275.06M	272.21M	277.60M	427.07M	395.81M	383.61M
EBITDA	198.98M	192.10M	169.68M	294.24M	270.42M	260.51M
Net Income	45.24M	50.37M	40.20M	147.15M	137.80M	126.77M
Balance Sheet
Total Assets	2.43B	2.30B	2.36B	2.43B	2.07B	1.75B
Cash, Cash Equivalents and Short-Term Investments	118.54M	99.67M	129.82M	173.75M	159.19M	349.94M
Total Debt	707.52M	682.83M	712.17M	637.70M	420.25M	250.24M
Total Liabilities	1.19B	1.13B	1.15B	1.27B	991.42M	763.97M
Stockholders Equity	1.25B	1.17B	1.22B	1.17B	1.07B	986.69M
Cash Flow
Free Cash Flow	32.08M	39.28M	-85.46M	-140.79M	-122.35M	109.42M
Operating Cash Flow	156.18M	162.05M	174.88M	160.76M	72.14M	235.22M
Investing Cash Flow	-117.22M	-116.94M	-258.67M	-308.09M	-376.83M	-139.03M
Financing Cash Flow	-69.19M	-64.52M	33.28M	166.21M	117.33M	-64.93M

Stepan Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 45.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCL, the sentiment is Positive. The current price of 45.41 is below the 20-day moving average (MA) of 46.21, above the 50-day MA of 44.98, and below the 200-day MA of 50.12, indicating a neutral trend. The MACD of 1.08 indicates Negative momentum. The RSI at 58.61 is Neutral, neither overbought nor oversold. The STOCH value of 78.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCL.

Stepan Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REX	78 Outperform	$1.12B	22.67	8.89%	―	-3.10%	-22.31%
ODC	68 Neutral	$687.81M	13.80	20.62%	1.41%	5.29%	17.29%
SCL	66 Neutral	$1.08B	24.05	3.67%	3.26%	5.35%	-1.43%
MTX	64 Neutral	$1.89B	-2,276.32	-0.09%	0.74%	-2.53%	-100.23%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
IOSP	54 Neutral	$1.92B	-1,320.24	-0.09%	2.20%	-4.49%	-100.80%
ECVT	47 Neutral	$1.09B	-10.24	-4.15%	―	7.75%	-302.73%

Stepan Company Corporate Events

Stepan Company Approves Executive Severance Benefit Plan

On November 26, 2025, Stepan Company‘s Board of Directors approved the Key Executive Severance Benefit Plan, designed to provide severance compensation and benefits to selected employees, including named executive officers, in cases of certain involuntary terminations. The plan outlines severance payments, health insurance coverage, and conditions for equity awards, aiming to support executives during transitions while maintaining compliance with company policies and legal requirements.

Stepan Company Announces Quarterly Dividend Amid Income Drop

On October 29, 2025, Stepan Company announced a quarterly cash dividend of $0.395 per share, payable on December 15, 2025. The company’s third-quarter results showed a 54% decrease in net income to $10.8 million, despite a 6% increase in adjusted EBITDA to $56.2 million. The decline was attributed to higher tax rates and interest expenses, alongside increased costs from the start-up of a new site in Pasadena, Texas. However, global sales volume rose by 1%, and free cash flow improved to $40.2 million, driven by reduced working capital. The company experienced growth in several strategic markets, including polymers and specialty products, despite challenges in the consumer products segment.

Stepan Company Announces Resignation of Key Executive

On October 10, 2025, Stepan Company announced the resignation of Samuel S. Hinrichsen, who served as Vice President and Interim Chief Financial Officer from October 30, 2024, to July 15, 2025, and later as Global Vice President, Finance and Investor Relations. His resignation, effective October 31, 2025, was not due to any disagreements with the company’s operations, policies, or practices. Stepan expressed gratitude for his contributions during his tenure.