STEPAN CO (SCL) Stock Fundamental Analysis
NYSE:SCL - New York Stock Exchange, Inc. - US8585861003 - Common Stock - Currency: USD
Taking everything into account, SCL scores 4 out of 10 in our fundamental rating. SCL was compared to 85 industry peers in the Chemicals industry. While SCL is still in line with the averages on profitability rating, there are concerns on its financial health. SCL is not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years SCL has always been profitable.
In the past 5 years SCL always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of SCL (2.35%) is better than 61.18% of its industry peers.
SCL has a Return On Equity (4.68%) which is comparable to the rest of the industry.
SCL has a Return On Invested Capital (3.96%) which is in line with its industry peers.
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 6.86%.
| 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
Looking at the Profit Margin, with a value of 2.53%, SCL is in line with its industry, outperforming 56.47% of the companies in the same industry.
SCL's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 3.54%, SCL is doing worse than 67.06% of the companies in the same industry.
In the last couple of years the Operating Margin of SCL has declined.
SCL's Gross Margin of 12.48% is on the low side compared to the rest of the industry. SCL is outperformed by 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SCL is destroying value.
The number of shares outstanding for SCL has been increased compared to 1 year ago.
Compared to 5 years ago, SCL has about the same amount of shares outstanding.
SCL has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.49 indicates that SCL is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of SCL (2.49) is better than 71.76% of its industry peers.
The Debt to FCF ratio of SCL is 317.88, which is on the high side as it means it would take SCL, 317.88 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 317.88, SCL perfoms like the industry average, outperforming 41.18% of the companies in the same 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 | 2.49 |
ROIC/WACC0.46
WACC8.6%
2.3 Liquidity
SCL has a Current Ratio of 1.21. This is a normal value and indicates that SCL is financially healthy and should not expect problems in meeting its short term obligations.
SCL's Current ratio of 1.21 is on the low side compared to the rest of the industry. SCL is outperformed by 78.82% 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 worse Quick ratio (0.79) than 77.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.15% over the past year.
The earnings per share for SCL have been decreasing by -15.51% on average. This is quite bad
Looking at the last year, SCL shows a decrease in Revenue. The Revenue has decreased by -0.16% in the last year.
SCL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.24% yearly.
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
The Earnings Per Share is expected to grow by 35.34% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 6.64% on average over the next years.
EPS Next Y44.15%
EPS Next 2Y35.34%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year8.56%
Revenue Next 2Y7.46%
Revenue Next 3Y8.56%
Revenue Next 5Y6.64%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 22.62, SCL is valued on the expensive side.
SCL's Price/Earnings is on the same level as the industry average.
SCL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.25.
Based on the Price/Forward Earnings ratio of 13.47, the valuation of SCL can be described as correct.
SCL's Price/Forward Earnings ratio is in line with the industry average.
SCL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.62 | ||
| Fwd PE | 13.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SCL is valued a bit cheaper than 61.18% of the companies in the same industry.
SCL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 591.06 | ||
| EV/EBITDA | 9.24 |
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.
A more expensive valuation may be justified as SCL's earnings are expected to grow with 35.34% in the coming years.
PEG (NY)0.51
PEG (5Y)N/A
EPS Next 2Y35.34%
EPS Next 3YN/A
5. Dividend
5.1 Amount
SCL has a Yearly Dividend Yield of 2.77%.
Compared to an average industry Dividend Yield of 3.75, SCL pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, SCL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
5.2 History
On average, the dividend of SCL grows each year by 8.06%, which is quite nice.
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
SCL pays out 60.89% of its income as dividend. 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 2Y35.34%
EPS Next 3YN/A
54.29
-1.22 (-2.2%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners86.22%
Inst Owner Change0.01%
Ins Owners4.64%
Ins Owner Change2.36%
Market Cap1.23B
Analysts76.67
Price Target86.7 (59.7%)
Short Float %1.71%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
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)-5.56%
EPS NQ rev (1m)25.83%
EPS NQ rev (3m)-14.08%
EPS NY rev (1m)-1.36%
EPS NY rev (3m)-14.29%
Revenue NQ rev (1m)2.36%
Revenue NQ rev (3m)2.53%
Revenue NY rev (1m)2.76%
Revenue NY rev (3m)1.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.62 | ||
| Fwd PE | 13.47 | ||
| P/S | 0.55 | ||
| P/FCF | 591.06 | ||
| P/OCF | 9.62 | ||
| P/B | 1.02 | ||
| P/tB | 1.15 | ||
| EV/EBITDA | 9.24 |
EPS(TTM)2.4
EY4.42%
EPS(NY)4.03
Fwd EY7.42%
FCF(TTM)0.09
FCFY0.17%
OCF(TTM)5.64
OCFY10.4%
SpS98.41
BVpS53.17
TBVpS47.15
PEG (NY)0.51
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 | 2.49 |
F-Score6
WACC8.6%
ROIC/WACC0.46
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 Y44.15%
EPS Next 2Y35.34%
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 Year8.56%
Revenue Next 2Y7.46%
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%