Stepan Company (SCL) AI Stock Analysis

• Market Cap: $1.12B
• Dividend Yield: 3.14%
• Average Volume (3M): 106.86K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 1.11
• Revenue Growth: 2.64%
• EPS Growth: 66.43%
• Country: US
• Employees: 2,396
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Chemicals - Specialty
• EPS (TTM): 0.52
• Shares Outstanding: 22,616,440
• 10 Day Avg. Volume: 106,301
• 30 Day Avg. Volume: 106,860
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.69
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 6.79
• Enterprise Value/Ebitda: 9.82
• 1Y Price Target: $54.00
• Price Target Upside: 10.93% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 65 Neutral
• Price Target: $54.00 ▲(10.93% Upside)

The overall stock score is primarily influenced by a stable financial performance and positive earnings call, despite technical indicators showing bearish trends. The valuation suggests moderate overvaluation but is balanced by a strong dividend yield. The company’s strategic growth initiatives in key segments offer a promising outlook, despite current challenges.

Stepan Company Business Overview & Revenue Model

Company Description

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products. It operates through three segments: Surfactants, Polymers, and Specialty Products. The Surfactants segment offers surfactants that are used as principal ingredients in consumer and industrial cleaning products, including detergents for washing clothes, dishes, carpets, and floors and walls, as well as shampoos and body washes; and other applications, such as fabric softeners, germicidal quaternary compounds, disinfectants, and lubricating ingredients. Its surfactants are also used in various applications, including emulsifiers for spreading agricultural products; and industrial applications comprising latex systems, plastics, and composites. The Polymers segment provides polyurethane polyols that are used in the manufacture of rigid foam for thermal insulation in the construction industry, as well as a base raw material for coatings, adhesives, sealants, and elastomers (CASE); polyester resins, including liquid and powdered products, which are used in CASE applications; and phthalic anhydride that is used in unsaturated polyester resins, alkyd resins, and plasticizers for applications in construction materials, as well as components of automotive, boating, and other consumer products. The Specialty Products segment offers flavors, emulsifiers, and solubilizers for use in food, flavoring, nutritional supplement, and pharmaceutical applications. It serves in the United States, France, Poland, the United Kingdom, Brazil, Mexico, and internationally. Stepan Company was founded in 1932 and is headquartered in Northbrook, Illinois.

How the Company Makes Money

Stepan Company generates revenue primarily through the production and sale of specialty chemicals, which are utilized across various industries. The company has several key revenue streams, including surfactants for home and personal care products, agricultural products, and polyurethane systems. Additionally, Stepan benefits from strategic partnerships with leading companies in the consumer goods and agricultural sectors, which enhance its market reach and product offerings. Factors contributing to its earnings include a strong focus on research and development, a diversified product portfolio, and a commitment to sustainability, allowing Stepan to meet customer demands while maintaining competitive pricing.

Stepan Company Financial Statement Overview

Summary

The company shows stable revenue and operational efficiency with a solid balance sheet characterized by conservative leverage. Profitability margins suggest room for improvement, but strong cash flow performance indicates robust operational cash generation.

Income Statement

The company shows a stable revenue base with a slight TTM revenue increase of 1.9% compared to the previous annual period. Gross profit margin for TTM is 12.5%, reflecting consistent operational efficiency, though slightly lower than historical figures. Net profit margin for TTM is 2.53%, indicating room for improvement in profitability. EBIT and EBITDA margins at 3.54% and 8.62% respectively, suggest moderate operational efficiency typical for the industry.

Balance Sheet

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.55, which is relatively conservative and indicative of manageable leverage. The equity ratio stands at 50.2%, showcasing a solid equity base. Return on equity for TTM is 4.68%, which, although positive, suggests potential for enhancing shareholder returns.

Cash Flow

The company's cash flow shows a favorable operating cash flow to net income ratio of 2.15 for TTM, highlighting strong cash generation relative to earnings. Free cash flow has improved significantly in the latest period, although historical volatility in free cash flow to net income ratio indicates potential cash flow management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.22B	2.18B	2.33B	2.77B	2.35B	1.87B
Gross Profit	277.39M	272.21M	277.60M	427.07M	395.81M	383.61M
EBITDA	191.65M	192.10M	169.68M	303.96M	265.31M	235.72M
Net Income	56.19M	50.37M	40.20M	147.15M	137.80M	126.77M
Balance Sheet
Total Assets	2.39B	2.30B	2.36B	2.43B	2.07B	1.75B
Cash, Cash Equivalents and Short-Term Investments	107.50M	99.67M	129.82M	173.75M	159.19M	349.94M
Total Debt	731.26M	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	1.20B	1.17B	1.22B	1.17B	1.07B	986.69M
Cash Flow
Free Cash Flow	88.65M	39.28M	-85.46M	-140.79M	-122.35M	109.42M
Operating Cash Flow	127.44M	162.05M	174.88M	160.76M	72.14M	235.22M
Investing Cash Flow	-118.94M	-116.94M	-258.67M	-308.09M	-376.83M	-139.03M
Financing Cash Flow	-21.77M	-64.52M	33.28M	166.21M	117.33M	-64.93M

Stepan Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 48.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 48.68 is below the 20-day moving average (MA) of 51.84, below the 50-day MA of 54.59, and below the 200-day MA of 59.61, indicating a bearish trend. The MACD of -1.75 indicates Positive momentum. The RSI at 34.38 is Neutral, neither overbought nor oversold. The STOCH value of 47.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCL.

Stepan Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRM	71 Outperform	$2.72B	43.90	7.06%	―	56.87%	―
SCL	65 Neutral	$1.12B	19.48	4.77%	3.14%	2.64%	66.43%
IOSP	61 Neutral	$2.06B	110.00	1.55%	1.96%	-5.45%	-87.13%
OLN	58 Neutral	$2.44B	41.89	-0.69%	3.76%	1.49%	-105.20%
NGVT	55 Neutral	$1.99B	―	-106.83%	―	-14.45%	49.92%
CC	51 Neutral	$2.19B	59.33	-87.50%	4.52%	2.48%	-459.90%
Sector *	44 Neutral	C$930.37M	-8.96	-0.02%	2.69%	23.24%	-42.45%

Stepan Company Corporate Events

Stepan Company Announces Quarterly Cash Dividend

On July 30, 2025, Stepan Company announced a quarterly cash dividend of $0.385 per share, payable on September 15, 2025. The company reported a 19% increase in net income for the second quarter of 2025, driven by growth in its Polymers and Crop Productivity businesses, despite challenges such as start-up costs and environmental reserve adjustments. The company also highlighted a 7% increase in net sales, attributed to higher selling prices and favorable product mix, while facing a negative free cash flow due to increased working capital needs.

Stepan Company Appoints New CFO Ruben Velasquez

On July 14, 2025, Stepan Company announced the appointment of Ruben Velasquez as Vice President and Chief Financial Officer, effective July 15, 2025. Velasquez, who brings over two decades of global finance leadership experience, previously held senior finance roles at 3M Company and Ecopetrol. His appointment is expected to bolster Stepan’s financial leadership, as he succeeds Samuel Hinrichsen, who will continue as Vice President of Finance.

Stepan Company Appoints Corning Painter as Director

On June 9, 2025, Stepan Company announced the appointment of Corning Painter as a Director, expanding the Board to eight members. Painter, who is the CEO of Orion S.A. and has extensive experience in the chemical industry, will also join several key committees, bringing strategic and operational expertise to the company.

Stepan Company Issues $75 Million in Senior Notes

On May 21, 2025, Stepan Company issued and sold $75 million in aggregate principal amount of 6.17% Senior Notes, divided equally between Series 2025-A and Series 2025-B, due May 21, 2033. The issuance is part of agreements with NYL Investors LLC and PGIM, Inc., and includes financial covenants and default provisions. The notes are guaranteed by Stepan’s subsidiaries, Stepan Specialty Products, LLC and Stepan Surfactants Holdings, LLC.