Stepan Company (SCL) AI Stock Analysis

• Market Cap: $1.21B
• Dividend Yield: 2.84%
• Average Volume (3M): 158.45K
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.07
• Revenue Growth: -0.16%
• EPS Growth: 47.70%
• Country: US
• Employees: 2,396
• Sector: Basic Materials
• Sector Strength: 62
• Industry: Chemicals - Specialty
• EPS (TTM): 0.84
• Shares Outstanding: 22,554,930
• 10 Day Avg. Volume: 214,005
• 30 Day Avg. Volume: 158,449
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 5.84
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Stepan Company presents a mixed investment case. Strengths include stable revenue, strong cash generation, and growth in key segments. However, the stock faces challenges such as high valuation, negative free cash flow, and operational hurdles in certain segments. Technical indicators show a short-term positive trend but highlight caution due to potential overvaluation.

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. 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.

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
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
39.28M	-85.46M	-140.79M	-122.35M	109.42M
	Operating Cash Flow
162.05M	174.88M	160.76M	72.14M	235.22M
	Investing Cash Flow
-116.94M	-258.67M	-308.09M	-376.83M	-139.03M
	Financing Cash Flow
-64.52M	33.28M	166.21M	117.33M	-64.93M

Stepan Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 53.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 53.52 is above the 20-day moving average (MA) of 49.40, below the 50-day MA of 54.06, and below the 200-day MA of 67.42, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 56.56 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, 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
SCL	67 Neutral	$1.21B	21.85	4.65%	2.84%	-0.16%	47.70%
IOSP	67 Neutral	$2.32B	65.09	3.02%	1.67%	-5.31%	-74.42%
OLN	64 Neutral	$2.36B	40.67	2.94%	3.88%	-1.13%	-81.74%
CC	56 Neutral	$1.81B	21.13	4.66%	8.26%	-4.05%	―
PRM	55 Neutral	$1.56B	―	-0.51%	―	74.16%	-112.26%
NGVT	53 Neutral	$1.43B	―	-88.14%	―	-17.68%	-214.18%
Sector *	49 Neutral	$1.96B	-1.23	-21.20%	3.72%	0.88%	-29.24%

Stepan Company Corporate Events

Stepan Company Approves Equity Incentive Plan at Meeting

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.

Spark’s Take on SCL Stock

According to Spark, TipRanks’ AI Analyst, SCL is a Neutral.

Stepan Company presents a mixed investment case. Strengths include stable revenue, strong cash generation, and growth in key segments. However, the stock faces challenges such as high valuation, negative free cash flow, and operational hurdles in certain segments. Technical indicators show a short-term positive trend but highlight caution due to potential overvaluation.

To see Spark’s full report on SCL stock, click here.

Edward J. Wehmer Retires from Stepan Company’s Board

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.