STEPAN CO (SCL) Stock Fundamental Analysis
NYSE:SCL - New York Stock Exchange, Inc. - US8585861003 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to SCL. SCL was compared to 85 industry peers in the Chemicals industry. Both the profitability and financial health of SCL have multiple concerns. SCL has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
SCL had positive earnings in the past year.
In the past year SCL had a positive cash flow from operations.
SCL had positive earnings in each of the past 5 years.
Of the past 5 years SCL 4 years had a positive operating cash flow.
1.2 Ratios
SCL has a Return On Assets (1.90%) which is comparable to the rest of the industry.
With a Return On Equity value of 3.76%, SCL perfoms like the industry average, outperforming 49.40% of the companies in the same industry.
SCL has a Return On Invested Capital (3.50%) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.76% | ||
| ROIC | 3.5% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of SCL (2.10%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SCL has declined.
SCL has a Operating Margin of 3.26%. This is in the lower half of the industry: SCL underperforms 72.29% of its industry peers.
In the last couple of years the Operating Margin of SCL has declined.
SCL has a worse Gross Margin (12.89%) than 77.11% of its industry peers.
In the last couple of years the Gross Margin of SCL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.26% | ||
| PM (TTM) | 2.1% | ||
| GM | 12.89% |
OM growth 3Y-24.2%
OM growth 5Y-14.3%
PM growth 3Y-26.73%
PM growth 5Y-16.07%
GM growth 3Y-9.55%
GM growth 5Y-7.34%
2. Health
2.1 Basic Checks
SCL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SCL has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.55 indicates that SCL is not a great score, but indicates only limited risk for bankruptcy at the moment.
SCL's Altman-Z score of 2.55 is fine compared to the rest of the industry. SCL outperforms 73.49% of its industry peers.
SCL has a debt to FCF ratio of 23.39. This is a negative value and a sign of low solvency as SCL would need 23.39 years to pay back of all of its debts.
SCL has a Debt to FCF ratio (23.39) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.29 indicates that SCL is not too dependend on debt financing.
The Debt to Equity ratio of SCL (0.29) is better than 73.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 23.39 | ||
| Altman-Z | 2.55 |
ROIC/WACC0.41
WACC8.48%
2.3 Liquidity
SCL has a Current Ratio of 1.27. This is a normal value and indicates that SCL is financially healthy and should not expect problems in meeting its short term obligations.
SCL has a Current ratio of 1.27. This is amonst the worse of the industry: SCL underperforms 84.34% of its industry peers.
A Quick Ratio of 0.86 indicates that SCL may have some problems paying its short term obligations.
With a Quick ratio value of 0.86, SCL is not doing good in the industry: 74.70% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
The earnings per share for SCL have decreased by -0.45% in the last year.
SCL shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -15.51% yearly.
SCL shows a decrease in Revenue. In the last year, the revenue decreased by -6.25%.
SCL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.24% yearly.
EPS 1Y (TTM)-0.45%
EPS 3Y-29.09%
EPS 5Y-15.51%
EPS Q2Q%-63.64%
Revenue 1Y (TTM)-6.25%
Revenue growth 3Y-2.41%
Revenue growth 5Y3.24%
Sales Q2Q%-1.23%
3.2 Future
The Earnings Per Share is expected to grow by 48.29% on average over the next years. This is a very strong growth
Based on estimates for the next years, SCL will show a small growth in Revenue. The Revenue will grow by 6.64% on average per year.
EPS Next Y68.18%
EPS Next 2Y48.29%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.78%
Revenue Next 2Y5.88%
Revenue Next 3Y8.56%
Revenue Next 5Y6.64%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 28.52, the valuation of SCL can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SCL indicates a slightly more expensive valuation: SCL is more expensive than 60.24% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.62, SCL is valued at the same level.
With a Price/Forward Earnings ratio of 16.96, SCL is valued correctly.
SCL's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of SCL to the average of the S&P500 Index (22.70), we can say SCL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.52 | ||
| Fwd PE | 16.96 |
4.2 Price Multiples
SCL's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, SCL is valued a bit more expensive than 60.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.94 | ||
| EV/EBITDA | 10.73 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as SCL's earnings are expected to grow with 48.29% in the coming years.
PEG (NY)0.42
PEG (5Y)N/A
EPS Next 2Y48.29%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.45%, SCL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.28, SCL pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, SCL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
The dividend of SCL is nicely growing with an annual growth rate of 9.67%!
SCL has been paying a dividend for at least 10 years, so it has a reliable track record.
SCL has decreased its dividend recently.
Dividend Growth(5Y)9.67%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
73.44% of the earnings are spent on dividend by SCL. This is not a sustainable payout ratio.
SCL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP73.44%
EPS Next 2Y48.29%
EPS Next 3YN/A
62.75
-1.16 (-1.82%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners86.22%
Inst Owner Change-88.3%
Ins Owners4.64%
Ins Owner Change-3.02%
Market Cap1.41B
Analysts76.67
Price Target91.8 (46.29%)
Short Float %1.91%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
Yearly Dividend1.47
Dividend Growth(5Y)9.67%
DP73.44%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)8.34%
Min EPS beat(2)-39.41%
Max EPS beat(2)56.09%
EPS beat(4)2
Avg EPS beat(4)21.19%
Min EPS beat(4)-39.41%
Max EPS beat(4)79.76%
EPS beat(8)3
Avg EPS beat(8)-0.39%
EPS beat(12)6
Avg EPS beat(12)5.78%
EPS beat(16)9
Avg EPS beat(16)8.26%
Revenue beat(2)0
Avg Revenue beat(2)-7.09%
Min Revenue beat(2)-7.59%
Max Revenue beat(2)-6.6%
Revenue beat(4)0
Avg Revenue beat(4)-5.2%
Min Revenue beat(4)-7.59%
Max Revenue beat(4)-1.43%
Revenue beat(8)1
Avg Revenue beat(8)-5.45%
Revenue beat(12)5
Avg Revenue beat(12)-1.09%
Revenue beat(16)9
Avg Revenue beat(16)1.04%
PT rev (1m)-7.22%
PT rev (3m)-7.22%
EPS NQ rev (1m)-22.14%
EPS NQ rev (3m)-22.14%
EPS NY rev (1m)-4.11%
EPS NY rev (3m)7.26%
Revenue NQ rev (1m)-1.5%
Revenue NQ rev (3m)-1.5%
Revenue NY rev (1m)-0.36%
Revenue NY rev (3m)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.52 | ||
| Fwd PE | 16.96 | ||
| P/S | 0.65 | ||
| P/FCF | 47.94 | ||
| P/OCF | 8.67 | ||
| P/B | 1.16 | ||
| P/tB | 1.31 | ||
| EV/EBITDA | 10.73 |
EPS(TTM)2.2
EY3.51%
EPS(NY)3.7
Fwd EY5.9%
FCF(TTM)1.31
FCFY2.09%
OCF(TTM)7.24
OCFY11.53%
SpS97.23
BVpS54.22
TBVpS47.89
PEG (NY)0.42
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.9% | ||
| ROE | 3.76% | ||
| ROCE | 4.21% | ||
| ROIC | 3.5% | ||
| ROICexc | 3.83% | ||
| ROICexgc | 4.22% | ||
| OM | 3.26% | ||
| PM (TTM) | 2.1% | ||
| GM | 12.89% | ||
| FCFM | 1.35% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-24.2%
OM growth 5Y-14.3%
PM growth 3Y-26.73%
PM growth 5Y-16.07%
GM growth 3Y-9.55%
GM growth 5Y-7.34%
F-Score5
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 23.39 | ||
| Debt/EBITDA | 1.92 | ||
| Cap/Depr | 120.41% | ||
| Cap/Sales | 6.1% | ||
| Interest Coverage | 2.49 | ||
| Cash Conversion | 89.46% | ||
| Profit Quality | 64.23% | ||
| Current Ratio | 1.27 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | 2.55 |
F-Score5
WACC8.48%
ROIC/WACC0.41
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-0.45%
EPS 3Y-29.09%
EPS 5Y-15.51%
EPS Q2Q%-63.64%
EPS Next Y68.18%
EPS Next 2Y48.29%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-6.25%
Revenue growth 3Y-2.41%
Revenue growth 5Y3.24%
Sales Q2Q%-1.23%
Revenue Next Year6.78%
Revenue Next 2Y5.88%
Revenue Next 3Y8.56%
Revenue Next 5Y6.64%
EBIT growth 1Y-6.32%
EBIT growth 3Y-26.03%
EBIT growth 5Y-11.52%
EBIT Next Year246.38%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y124.93%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-15.15%
OCF growth 3YN/A
OCF growth 5YN/A