Stepan Co. (SCL) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

ChampionX Corp.

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NewMarket Corp.

Minerals Technologies, Inc.

Rogers Corp.

Stepan Co.

The Chemours Co.

Tronox Holdings Plc

Livent Corp.

Why is Stepan Co. ?

Poor long term growth as Operating profit has grown by an annual rate -11.47% of over the last 5 years

Negative results in Jun 25

OPERATING CASH FLOW(Y) Lowest at USD 109.13 MM
CASH AND EQV(HY) Lowest at USD 196.4 MM
INTEREST(Q) Highest at USD 5.49 MM

With ROCE of 4.45%, it has a attractive valuation with a 1.15 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -36.20%, its profits have risen by 11% ; the PEG ratio of the company is 2.5

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -36.20% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Specialty Chemicals)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Stepan Co. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Stepan Co.

-23.62%

-1.24

34.43%

S&P 500

14.9%

0.70

20.15%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.83%

EBIT Growth (5y)

-13.60%

EBIT to Interest (avg)

17.57

Debt to EBITDA (avg)

1.95

Net Debt to Equity (avg)

0.47

Sales to Capital Employed (avg)

1.22

Tax Ratio

14.40%

Dividend Payout Ratio

68.74%

Pledged Shares

Institutional Holding

91.53%

ROCE (avg)

9.49%

ROE (avg)

9.19%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.02

EV to EBIT

24.01

EV to EBITDA

9.21

EV to Capital Employed

1.01

EV to Sales

0.79

PEG Ratio

Dividend Yield

2.77%

ROCE (Latest)

4.21%

ROE (Latest)

3.63%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Mildly Bullish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Mildly Bullish

Dow Theory

Mildly Bearish

Mildly Bullish

OBV

Mildly Bearish

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

2What is working for the Company

DIVIDEND PAYOUT RATIO(Y)

Highest at 81.31%

DEBT-EQUITY RATIO (HY)

Lowest at 48.44 %

-17What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at USD 156.18 MM

RAW MATERIAL COST(Y)

Grown by 14.1% (YoY

CASH AND EQV(HY)

Lowest at USD 207.44 MM

INTEREST(Q)

Highest at USD 6.82 MM

NET PROFIT(Q)

At USD 10.84 MM has Fallen at -25.26%

Here's what is working for Stepan Co.

Debt-Equity Ratio

Lowest at 48.44 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Dividend Payout Ratio

Highest at 81.31%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Depreciation

Highest at USD 32.75 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Stepan Co.

Operating Cash Flow

Lowest at USD 156.18 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (USD MM)

Interest

At USD 6.82 MM has Grown at 24.25%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Interest

Highest at USD 6.82 MM

in the last five periods and Increased by 24.25% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Net Profit

At USD 10.84 MM has Fallen at -25.26%

over average net sales of the previous four periods of USD 14.5 MM

MOJO Watch

Near term Net Profit trend is negative

Net Profit (USD MM)

Cash and Eqv

Lowest at USD 207.44 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Raw Material Cost

Grown by 14.1% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales