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Stepan Company (SCL)
NYSE:SCL
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Stepan Company
(NYSE:SCL)
Rating:68Neutral
Price Target:
$59.00
▲( 8.40% Upside)
Stepan Company (SCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.23B
Dividend Yield2.79%
Average Volume (3M)153.88K
Price to Earnings (P/E)22.2
Beta (1Y)1.06
Revenue Growth-0.16%
EPS Growth47.70%
CountryUS
Employees2,396
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.84
Shares Outstanding22,578,450
10 Day Avg. Volume126,796
30 Day Avg. Volume153,877
Financial Highlights & Ratios
PEG Ratio1.93
Price to Book (P/B)1.02
Price to Sales (P/S)0.00
P/FCF Ratio10.56
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 Covering1
Stepan Company Business Overview & Revenue Model
Company DescriptionStepan 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 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 shows stable revenue and moderate profitability with room for improvement. The balance sheet is strong with conservative leverage, and cash flow performance is robust, indicating strong operational cash generation despite some historical volatility.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.75
Positive
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.70
Positive
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.68
Positive
| 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 | EBIT |
| 78.60M | 70.48M | 58.61M | 105.15M | 86.61M | 92.09M | EBITDA |
| 191.65M | 192.10M | 169.68M | 303.96M | 265.31M | 235.72M | Net Income Common Stockholders |
| 56.19M | 50.37M | 40.20M | 147.15M | 137.80M | 126.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 107.50M | 99.67M | 129.82M | 173.75M | 159.19M | 349.94M | Total Assets |
| 2.39B | 2.30B | 2.36B | 2.43B | 2.07B | 1.75B | Total Debt |
| 659.30M | 682.83M | 712.17M | 587.14M | 322.86M | 160.81M | Net Debt |
| 551.80M | 583.17M | 582.35M | 413.39M | 163.68M | -189.13M | 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 | ||||
| 114.45M | 39.28M | -85.46M | -140.79M | -122.35M | 109.42M | Operating Cash Flow |
| 120.50M | 162.05M | 174.88M | 160.76M | 72.14M | 235.22M | Investing Cash Flow |
| -92.53M | -116.94M | -258.67M | -308.09M | -376.83M | -139.03M | Financing Cash Flow |
| -44.54M | -64.52M | 33.28M | 166.21M | 117.33M | -64.93M |
Stepan Company Technical Analysis
Negative
54.43
Price Trends
52.93
Positive
57.31
Negative
65.53
Negative
Market Momentum
0.83
Negative
53.24
Neutral
20.42
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 54.43 is above the 20-day moving average (MA) of 53.94, above the 50-day MA of 52.93, and below the 200-day MA of 65.53, indicating a neutral trend. The MACD of 0.83 indicates Negative momentum. The RSI at 53.24 is Neutral, neither overbought nor oversold. The STOCH value of 20.42 is Neutral, 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 (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.73B | 14.97 | 11.76% | ― | 70.16% | ― | |
68 Neutral | $1.23B | 22.20 | 4.65% | 2.79% | -0.16% | 47.70% | |
66 Neutral | $2.14B | 80.83 | 2.21% | 1.81% | -7.91% | -81.73% | |
58 Neutral | $2.23B | 38.13 | 2.94% | 4.13% | -1.13% | -81.74% | |
54 Neutral | $1.49B | ― | -88.14% | ― | -17.68% | -214.32% | |
50 Neutral | $2.00B | -1.13 | -21.16% | 3.71% | 2.15% | -30.95% | |
49 Neutral | $1.54B | 50.05 | 4.66% | 9.71% | -0.68% | ― |
* Basic Materials Sector Average
Performance Comparison
SCL
Stepan Company
54.43
-29.47
-35.13%
IOSP
Innospec
85.58
-40.82
-32.29%
OLN
Olin
19.35
-32.99
-63.03%
CC
Chemours Company
10.30
-15.02
-59.32%
NGVT
Ingevity
40.89
-6.97
-14.56%
PRM
Perimeter Solutions
11.73
4.22
56.19%
Stepan Company Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 12.95%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were significant achievements, including strong growth in the Surfactant and Specialty Products segments, volume growth across several markets, and a successful startup of a new site, there were also notable challenges. These included decreased EBITDA in the Polymers segment, negative free cash flow, and increased expenses at the new site. The overall sentiment is balanced with positive and negative aspects.Q1-2025 Updates
Positive Updates
Surfactant and Specialty Products Growth
Surfactant and Specialty Products segments delivered double-digit adjusted EBITDA growth. Surfactant net sales increased by 10% and Specialty Product net sales increased by 11% compared to the prior year.
Volume Growth Across the Board
Overall volume grew by 4%, with Surfactants up 3%, Polymers up 7%, and MCT product line up 4%. Agricultural and oilfield end markets experienced double-digit volume growth.
Improved Financial Metrics
Adjusted EBITDA was $57.5 million, a 12% increase year-over-year. Adjusted net income was $19.3 million, up 32% year-over-year.
Successful Startup of Pasadena, Texas Site
The new Pasadena, Texas site is operational and produced six different products. The site is expected to reach full contribution in the second half of 2025.
Dividend Growth
The company paid $8.7 million in dividends and declared a quarterly cash dividend of $0.385 per share. Stepan has increased its dividend for 57 consecutive years.
Negative Updates
Polymers Segment Challenges
Polymers adjusted EBITDA decreased 2% year-over-year. The segment faced less favorable product mix and high cost inventory carryover.
Negative Free Cash Flow
Free cash flow was negative at $25.8 million, reflecting higher working capital requirements and increased raw material purchases.
Impact of Higher Pre-Operating Expenses
Higher pre-operating expenses at the Pasadena, Texas site partially offset the adjusted EBITDA growth.
Commodity Consumer Product Demand Decline
Lower demand within the commodity consumer product end markets partially offset growth in other areas.
Company Guidance
During the Stepan Company First Quarter 2025 Earnings Conference Call, the company provided guidance and discussed various financial metrics. For the first quarter of 2025, Stepan reported an adjusted EBITDA of $57.5 million, marking a 12% increase from the previous year, driven by double-digit growth in Surfactants and Specialty Products, despite a slight decrease in Polymers. The company also experienced a 4% growth in volume, with notable increases in Surfactants (3%) and Polymers (7%). Adjusted net income rose to $19.3 million, a 32% increase year-over-year, aided by a lower tax rate. However, free cash flow was negative at $25.8 million due to higher working capital requirements and raw material purchases. The company paid $8.7 million in dividends and announced a quarterly cash dividend of $0.385 per share. Stepan also highlighted the successful startup of its new Pasadena, Texas site, with expectations for full operational contribution in the second half of 2025. The company remains cautiously optimistic about delivering positive free cash flow for the full year and continuing growth in key strategic markets.Stepan Company Corporate Events
Private Placements and Financing
Stepan Company Issues $75 Million in Senior Notes
Neutral
May 21, 2025
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.
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Stepan Company Approves Equity Incentive Plan at Meeting
Neutral
May 5, 2025
Stepan Company held its Annual Meeting of Stockholders on April 29, 2025, where stockholders approved the 2022 Equity Incentive Compensation Plan, which had been amended and restated effective the same day. The meeting also included the election of two directors, an advisory vote on executive compensation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2025. These decisions reflect the company’s ongoing governance and strategic planning efforts.
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.