STEPAN CO (SCL) Stock Fundamental Analysis
NYSE:SCL - New York Stock Exchange, Inc. - US8585861003 - Common Stock - Currency: USD
Overall SCL gets a fundamental rating of 4 out of 10. We evaluated SCL against 85 industry peers in the Chemicals industry. SCL has a bad profitability rating. Also its financial health evaluation is rather negative. SCL has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year SCL was profitable.
SCL had a positive operating cash flow in the past year.
Each year in the past 5 years SCL has been profitable.
SCL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.19%, SCL is in line with its industry, outperforming 55.29% of the companies in the same industry.
SCL's Return On Equity of 4.31% is in line compared to the rest of the industry. SCL outperforms 55.29% of its industry peers.
With a Return On Invested Capital value of 3.59%, SCL is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for SCL is in line with the industry average of 7.05%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.19% | ||
| ROE | 4.31% | ||
| ROIC | 3.59% |
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
SCL has a Profit Margin (2.31%) which is comparable to the rest of the industry.
SCL's Profit Margin has declined in the last couple of years.
SCL's Operating Margin of 3.23% is on the low side compared to the rest of the industry. SCL is outperformed by 68.24% of its industry peers.
In the last couple of years the Operating Margin of SCL has declined.
Looking at the Gross Margin, with a value of 12.49%, SCL is doing worse than 75.29% of the companies in the same industry.
In the last couple of years the Gross Margin of SCL has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.23% | ||
| PM (TTM) | 2.31% | ||
| GM | 12.49% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SCL is destroying value.
SCL has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SCL has about the same amount of shares outstanding.
The debt/assets ratio for SCL has been reduced compared to a year ago.
2.2 Solvency
SCL has an Altman-Z score of 2.47. 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.
The Altman-Z score of SCL (2.47) is better than 75.29% of its industry peers.
SCL has a debt to FCF ratio of 15.92. This is a negative value and a sign of low solvency as SCL would need 15.92 years to pay back of all of its debts.
The Debt to FCF ratio of SCL (15.92) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.28 indicates that SCL is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.28, SCL is doing good in the industry, outperforming 72.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 15.92 | ||
| Altman-Z | 2.47 |
ROIC/WACC0.43
WACC8.25%
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.
Looking at the Current ratio, with a value of 1.21, SCL is doing worse than 77.65% of the companies in the same industry.
SCL has a Quick Ratio of 1.21. This is a bad value and indicates that SCL is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.78, SCL is doing worse than 74.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The earnings per share for SCL have decreased by -0.45% in the last year.
Measured over the past years, SCL shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -15.51% on average per year.
The Revenue has decreased by -6.25% in the past year.
The Revenue has been growing slightly by 3.24% on average over the past years.
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
SCL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 40.56% yearly.
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 Y46.14%
EPS Next 2Y40.56%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year5.64%
Revenue Next 2Y5.88%
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
The Price/Earnings ratio is 21.93, which indicates a rather expensive current valuation of SCL.
SCL's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of SCL to the average of the S&P500 Index (28.79), we can say SCL is valued slightly cheaper.
A Price/Forward Earnings ratio of 15.00 indicates a correct valuation of SCL.
The rest of the industry has a similar Price/Forward Earnings ratio as SCL.
The average S&P500 Price/Forward Earnings ratio is at 21.38. SCL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.93 | ||
| Fwd PE | 15 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SCL.
SCL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.7 | ||
| EV/EBITDA | 8.83 |
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 40.56% in the coming years.
PEG (NY)0.48
PEG (5Y)N/A
EPS Next 2Y40.56%
EPS Next 3YN/A
5. Dividend
5.1 Amount
SCL has a Yearly Dividend Yield of 3.17%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of SCL has falen by -23.18%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 3.85, SCL pays a bit more dividend than its industry peers.
SCL's Dividend Yield is a higher than the S&P500 average which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
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
67.40% 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.
DP67.4%
EPS Next 2Y40.56%
EPS Next 3YN/A
48.24
-0.37 (-0.76%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners86.22%
Inst Owner Change-38.33%
Ins Owners4.64%
Ins Owner Change-2.61%
Market Cap1.09B
Analysts76.67
Price Target86.7 (79.73%)
Short Float %1.09%
Short Ratio1.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
Yearly Dividend1.51
Dividend Growth(5Y)8.06%
DP67.4%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.48%
Min EPS beat(2)-65.06%
Max EPS beat(2)56.09%
EPS beat(4)2
Avg EPS beat(4)7.85%
Min EPS beat(4)-65.06%
Max EPS beat(4)79.76%
EPS beat(8)2
Avg EPS beat(8)-9.61%
EPS beat(12)6
Avg EPS beat(12)0.73%
EPS beat(16)8
Avg EPS beat(16)2.33%
Revenue beat(2)0
Avg Revenue beat(2)-3.98%
Min Revenue beat(2)-7.59%
Max Revenue beat(2)-0.36%
Revenue beat(4)0
Avg Revenue beat(4)-4.93%
Min Revenue beat(4)-7.59%
Max Revenue beat(4)-0.36%
Revenue beat(8)0
Avg Revenue beat(8)-5.5%
Revenue beat(12)4
Avg Revenue beat(12)-1.8%
Revenue beat(16)8
Avg Revenue beat(16)0.56%
PT rev (1m)-5.56%
PT rev (3m)-12.37%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-43.61%
EPS NY rev (1m)0%
EPS NY rev (3m)-19.41%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.1%
Revenue NY rev (1m)0.26%
Revenue NY rev (3m)-2.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.93 | ||
| Fwd PE | 15 | ||
| P/S | 0.5 | ||
| P/FCF | 27.7 | ||
| P/OCF | 6.71 | ||
| P/B | 0.93 | ||
| P/tB | 1.05 | ||
| EV/EBITDA | 8.83 |
EPS(TTM)2.2
EY4.56%
EPS(NY)3.22
Fwd EY6.66%
FCF(TTM)1.74
FCFY3.61%
OCF(TTM)7.19
OCFY14.9%
SpS96.69
BVpS51.88
TBVpS45.94
PEG (NY)0.48
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.19% | ||
| ROE | 4.31% | ||
| ROCE | 4.31% | ||
| ROIC | 3.59% | ||
| ROICexc | 3.82% | ||
| ROICexgc | 4.18% | ||
| OM | 3.23% | ||
| PM (TTM) | 2.31% | ||
| GM | 12.49% | ||
| FCFM | 1.8% |
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 Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 15.92 | ||
| Debt/EBITDA | 1.82 | ||
| Cap/Depr | 109.43% | ||
| Cap/Sales | 5.63% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 88.71% | ||
| Profit Quality | 77.98% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 2.47 |
F-Score6
WACC8.25%
ROIC/WACC0.43
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)-0.45%
EPS 3Y-29.09%
EPS 5Y-15.51%
EPS Q2Q%-63.64%
EPS Next Y46.14%
EPS Next 2Y40.56%
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 Year5.64%
Revenue Next 2Y5.88%
Revenue Next 3Y8.56%
Revenue Next 5Y6.64%
EBIT growth 1Y-2.93%
EBIT growth 3Y-26.03%
EBIT growth 5Y-11.52%
EBIT Next Year226.84%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y145.96%
FCF growth 3YN/A
FCF growth 5Y-19.02%
OCF growth 1Y-7.33%
OCF growth 3Y30.97%
OCF growth 5Y-5.79%