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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SCL was profitable.
In the past year SCL had a positive cash flow from operations.
In the past 5 years SCL has always been profitable.
SCL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SCL has a Return On Assets (2.35%) which is comparable to the rest of the industry.
With a Return On Equity value of 4.68%, SCL perfoms like the industry average, outperforming 56.47% of the companies in the same industry.
SCL has a Return On Invested Capital (3.96%) which is comparable to the rest of the industry.
SCL had an Average Return On Invested Capital over the past 3 years of 5.63%. This is in line with the industry average of 6.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 4.68% | ||
| ROIC | 3.96% |
ROA(3y)3.31%
ROA(5y)4.77%
ROE(3y)6.74%
ROE(5y)9.18%
ROIC(3y)5.63%
ROIC(5y)7.38%
1.3 Margins
With a Profit Margin value of 2.53%, SCL perfoms like the industry average, outperforming 55.29% of the companies in the same industry.
In the last couple of years the Profit Margin of SCL has declined.
SCL's Operating Margin of 3.54% is on the low side compared to the rest of the industry. SCL is outperformed by 67.06% of its industry peers.
In the last couple of years the Operating Margin of SCL has declined.
SCL has a worse Gross Margin (12.48%) than 78.82% of its industry peers.
SCL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.54% | ||
| PM (TTM) | 2.53% | ||
| GM | 12.48% |
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.
Compared to 1 year ago, SCL has more shares outstanding
The number of shares outstanding for SCL remains at a similar level compared to 5 years ago.
SCL has a better debt/assets ratio than last year.
2.2 Solvency
SCL has an Altman-Z score of 2.52. This is not the best score and indicates that SCL is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.52, SCL is in the better half of the industry, outperforming 71.76% of the companies in the same industry.
SCL has a debt to FCF ratio of 317.88. This is a negative value and a sign of low solvency as SCL would need 317.88 years to pay back of all of its debts.
The Debt to FCF ratio of SCL (317.88) is comparable to the rest of the industry.
SCL has a Debt/Equity ratio of 0.28. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SCL (0.28) is better than 76.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 317.88 | ||
| Altman-Z | 2.52 |
ROIC/WACC0.47
WACC8.52%
2.3 Liquidity
A Current Ratio of 1.21 indicates that SCL should not have too much problems paying its short term obligations.
SCL has a worse Current ratio (1.21) than 80.00% of its industry peers.
A Quick Ratio of 0.79 indicates that SCL may have some problems paying its short term obligations.
SCL has a Quick ratio of 0.79. This is amonst the worse of the industry: SCL underperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
SCL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.15%, which is quite good.
SCL shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -15.51% yearly.
The Revenue has decreased by -0.16% in the past year.
The Revenue has been growing slightly by 3.24% on average over the past years.
EPS 1Y (TTM)12.15%
EPS 3Y-29.09%
EPS 5Y-15.51%
EPS Q2Q%31.25%
Revenue 1Y (TTM)-0.16%
Revenue growth 3Y-2.41%
Revenue growth 5Y3.24%
Sales Q2Q%7.59%
3.2 Future
SCL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 38.94% yearly.
The Revenue is expected to grow by 6.64% on average over the next years.
EPS Next Y45.99%
EPS Next 2Y38.94%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.74%
Revenue Next 2Y7.31%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
SCL is valuated rather expensively with a Price/Earnings ratio of 24.50.
SCL's Price/Earnings is on the same level as the industry average.
SCL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 13.85, the valuation of SCL can be described as correct.
SCL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SCL is cheaper than 62.35% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SCL to the average of the S&P500 Index (21.76), we can say SCL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.5 | ||
| Fwd PE | 13.85 |
4.2 Price Multiples
61.18% of the companies in the same industry are more expensive than SCL, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as SCL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 640.27 | ||
| EV/EBITDA | 9.58 |
4.3 Compensation for Growth
SCL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SCL's earnings are expected to grow with 38.94% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.53
PEG (5Y)N/A
EPS Next 2Y38.94%
EPS Next 3YN/A
5. Dividend
5.1 Amount
SCL has a Yearly Dividend Yield of 2.79%. Purely for dividend investing, there may be better candidates out there.
SCL's Dividend Yield is a higher than the industry average which is at 3.69.
SCL's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
The dividend of SCL is nicely growing with an annual growth rate of 8.06%!
SCL has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SCL decreased recently.
Dividend Growth(5Y)8.06%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
60.89% of the earnings are spent on dividend by SCL. This is not a sustainable payout ratio.
The dividend of SCL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP60.89%
EPS Next 2Y38.94%
EPS Next 3YN/A
58.81
+1.61 (+2.81%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners84.87%
Inst Owner Change0.01%
Ins Owners5.42%
Ins Owner Change2.36%
Market Cap1.33B
Analysts76.67
Price Target86.7 (47.42%)
Short Float %1.8%
Short Ratio2.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend1.51
Dividend Growth(5Y)8.06%
DP60.89%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-17.21%
Min EPS beat(2)-65.06%
Max EPS beat(2)30.63%
EPS beat(4)2
Avg EPS beat(4)-4.44%
Min EPS beat(4)-65.06%
Max EPS beat(4)56.09%
EPS beat(8)3
Avg EPS beat(8)-2.6%
EPS beat(12)6
Avg EPS beat(12)0.55%
EPS beat(16)8
Avg EPS beat(16)2.63%
Revenue beat(2)1
Avg Revenue beat(2)2.45%
Min Revenue beat(2)-0.36%
Max Revenue beat(2)5.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.32%
Min Revenue beat(4)-7.59%
Max Revenue beat(4)5.27%
Revenue beat(8)1
Avg Revenue beat(8)-4.75%
Revenue beat(12)4
Avg Revenue beat(12)-2.02%
Revenue beat(16)8
Avg Revenue beat(16)0.59%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)1.69%
EPS NQ rev (3m)-6.25%
EPS NY rev (1m)1.27%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)2.17%
Revenue NY rev (1m)-0.75%
Revenue NY rev (3m)2.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.5 | ||
| Fwd PE | 13.85 | ||
| P/S | 0.6 | ||
| P/FCF | 640.27 | ||
| P/OCF | 10.42 | ||
| P/B | 1.11 | ||
| P/tB | 1.25 | ||
| EV/EBITDA | 9.58 |
EPS(TTM)2.4
EY4.08%
EPS(NY)4.25
Fwd EY7.22%
FCF(TTM)0.09
FCFY0.16%
OCF(TTM)5.64
OCFY9.6%
SpS98.41
BVpS53.17
TBVpS47.15
PEG (NY)0.53
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.35% | ||
| ROE | 4.68% | ||
| ROCE | 4.76% | ||
| ROIC | 3.96% | ||
| ROICexc | 4.24% | ||
| ROICexgc | 4.65% | ||
| OM | 3.54% | ||
| PM (TTM) | 2.53% | ||
| GM | 12.48% | ||
| FCFM | 0.09% |
ROA(3y)3.31%
ROA(5y)4.77%
ROE(3y)6.74%
ROE(5y)9.18%
ROIC(3y)5.63%
ROIC(5y)7.38%
ROICexc(3y)6.06%
ROICexc(5y)8.61%
ROICexgc(3y)6.68%
ROICexgc(5y)9.41%
ROCE(3y)6.76%
ROCE(5y)8.87%
ROICexcg growth 3Y-28.84%
ROICexcg growth 5Y-19.33%
ROICexc growth 3Y-28.18%
ROICexc growth 5Y-20.06%
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-Score6
Asset Turnover0.93
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 317.88 | ||
| Debt/EBITDA | 1.72 | ||
| Cap/Depr | 110.1% | ||
| Cap/Sales | 5.64% | ||
| Interest Coverage | 2.68 | ||
| Cash Conversion | 66.22% | ||
| Profit Quality | 3.69% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 2.52 |
F-Score6
WACC8.52%
ROIC/WACC0.47
Cap/Depr(3y)225.06%
Cap/Depr(5y)209.82%
Cap/Sales(3y)9.23%
Cap/Sales(5y)8.59%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.15%
EPS 3Y-29.09%
EPS 5Y-15.51%
EPS Q2Q%31.25%
EPS Next Y45.99%
EPS Next 2Y38.94%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.16%
Revenue growth 3Y-2.41%
Revenue growth 5Y3.24%
Sales Q2Q%7.59%
Revenue Next Year7.74%
Revenue Next 2Y7.31%
Revenue Next 3Y8.56%
Revenue Next 5Y6.64%
EBIT growth 1Y9.96%
EBIT growth 3Y-26.03%
EBIT growth 5Y-11.52%
EBIT Next Year223.94%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y100.93%
FCF growth 3YN/A
FCF growth 5Y-19.02%
OCF growth 1Y16.28%
OCF growth 3Y30.97%
OCF growth 5Y-5.79%