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what it is
Stepan sells the chemical ingredients that end up inside cleaners, construction materials, food products, and supplements.
how it gets paid
Last year Stepan made $2.3B in revenue. Has three reportable segments: Surfactants was the main engine at $1.6B, or 70% of sales.
why it's growing
Revenue grew 7.0% last year. The key number is the $0.42 expected EPS that turned into a -$0.02 result.
what just happened
The latest quarter was a mess: EPS came in at -$0.02 versus a $0.42 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
50/100 earnings predictability — expect surprises
28.0x trailing p/e — priced about right
2.6% dividend yield — cash in your pocket every quarter
7.0% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
Stepan sells the chemical ingredients that end up inside cleaners, construction materials, food products, and supplements.
Stepan wins by being buried inside your customers' formulas. Surfactants were 70% of 2024 sales, so once your cleaner or farm product works, changing suppliers risks wrecking the recipe. That is switching costs → changing vendors is painful and risky → so what: Stepan can stay in the formula even when the cycle gets ugly.
How they make money
$2.3B
annual revenue · their business grew +7.0% last year
Has three reportable segments: Surfactants
$1.6B
n/a
Polymers
$621M
n/a
The products that matter
manufactures specialty chemicals
Specialty and Intermediate Chemicals
$2.3B revenue · +7.0% growth
It's the full business in the snapshot data. The catch is that $2.3B of sales still translated into only a 3.5% net margin, so you are not short on scale. You are short on earnings conversion.
100% of revenue
Key numbers
28.0x
trailing p/e
That is the price-to-earnings ratio → how much you pay for each dollar of profit → so what: you are paying up for a company that earned just $2.25 a share in 2025.
4.1%
net margin
Net margin means profit after all costs. Stepan keeps 4.1 cents from each sales dollar, which leaves little room for mistakes.
7.0%
return on capital
Return on capital means profit from the money tied up in the business. At 7.0%, this is decent, not magical.
$357M
long-term debt
Debt is 20% of capital, which is manageable. You are not staring at a balance-sheet emergency.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- long-term debt $357M (20% of capital)
- net profit margin 4.1% — keeps 4 cents of every dollar in revenue
- return on equity 10% — $0.10 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SCL 3 years ago → it's now worth $6,240.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
The latest quarter was a mess: EPS came in at -$0.02 versus a $0.42 estimate.
That miss clashes with the quarterly run-rate in the base data, where 2025 EPS totaled $2.25. The quiet part: the rebound story exists more in forecasts than in delivered profits.
$1.8B
revenue
$1.83
eps
12.3%
gross margin
the number that mattered
The key number is the $0.42 expected EPS that turned into a -$0.02 result, because estimate cuts can crush a stock faster than slow revenue growth.
-
the company posted mixed results for the september period, with solid growth from the surfactants business and higher specialty product net sales being partly offset by a moderate top-line decline at the polymer operation.
-
moreover, earnings per share of $0.47 were no match for the prior-year result.
-
nonetheless, market sentiment for this beaten-down stock has improved dramatically in recent times.this has been supported by the company's strategic growth initiatives and the anticipation of rising profit margins.
-
the board of directors has increased the dividend by 3%.
-
beginning with the november payout, the quarterly dividend is now $0.395 per share.the payout will probably continue to rise at a steady pace in the years ahead. The company has announced the closing of the sale of manufacturing assets in lake providence, louisiana.
source: company earnings report, 2026
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What could go wrong
Stepan does not have much room for error. When a chemicals company keeps only 3.5 cents of profit on each revenue dollar, cost swings, weak pricing, and compliance expense stop being side issues and become the whole thesis.
med
raw material and energy cost pressure
Feedstocks and energy do not need to spike dramatically to hurt you here. A low-margin chemicals business feels cost inflation faster because the buffer is already small.
With a 3.5% net margin, even modest cost pressure can take a disproportionate bite out of earnings.
med
pricing power that looks limited in the numbers
Return on capital is 6.0%. That is the quiet part loud. It suggests Stepan has not consistently turned scale into premium economics or easy pass-through pricing.
If revenue grows but margins stay around 3.5%, you get a bigger company without much better shareholder economics.
med
environmental and compliance costs
Chemical manufacturing always carries operating, regulatory, and cleanup obligations. For Stepan, that matters more because the company is only about a $1B stock with already-thin profitability.
Unexpected compliance or remediation expense lands on a business where quarterly margin was recently just 2.0%.
The combined risk picture is simple: you do not need a collapse in demand to break the thesis. You just need margins to stay too small for too long.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
quarterly margin
2.0% quarterly margin is the red flag. If that number stays weak, revenue growth will not save your thesis.
metric
profit conversion
Watch whether more sales finally show up in EPS. Last year gave you +7.0% revenue growth, but return on equity was still only 8%.
calendar
next earnings print
The provided data includes no second major catalyst beyond earnings, so the next report matters more than usual.
trend
how much valuation is doing the work
SCL sits near the top of its $42–$64 range at $63.11. If operating results do not improve from here, the stock is asking valuation to carry too much of the story.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts see a stock acting mostly like the market, not one forcing them to rewrite the script.
risk profile
average
stability score 3 — middle-of-the-pack risk. You are not buying a bunker, but you are not buying chaos either.
chart momentum
bottom 5%
technical score 5 — the weakest rating here. Translation: recent price action still screens like a laggard even with the stock near the top of its 52-week range.
earnings predictability
50 / 100
Earnings can surprise you here. That matters more when small margin shifts have oversized effects on profit.
source: institutional data
Institutional activity
93 buyers vs. 100 sellers in 3q2025. total institutional holdings: 19.5M shares.
source: institutional data
Price targets
3-5 year target range
$50
$99
$63
current price
$75
target midpoint · +19% from current · 3-5yr high: $135 (+115% · 23% ann'l return)
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