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Stepan Company (SCL)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$20.42 - $32.33$25.86
Multi-Stage$28.03 - $30.62$29.30
Blended Fair Value$27.58
Current Price$47.70
Upside-42.19%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.01%8.24%1.481.441.341.231.111.010.910.830.760.71
YoY Growth--3.29%7.51%8.87%10.54%9.99%10.74%10.31%9.11%6.31%5.93%
Dividend Yield--2.69%1.62%1.30%1.24%0.87%1.14%1.03%0.99%0.96%1.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)45.24
(-) Cash Dividends Paid (M)34.76
(=) Cash Retained (M)10.49
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)9.055.663.39
Cash Retained (M)10.4910.4910.49
(-) Cash Required (M)-9.05-5.66-3.39
(=) Excess Retained (M)1.444.837.09
(/) Shares Outstanding (M)22.8922.8922.89
(=) Excess Retained per Share0.060.210.31
LTM Dividend per Share1.521.521.52
(+) Excess Retained per Share0.060.210.31
(=) Adjusted Dividend1.581.731.83
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate1.24%2.24%3.24%
Fair Value$20.42$25.86$32.33
Upside / Downside-57.19%-45.80%-32.23%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)45.2446.2647.2948.3549.4450.5552.06
Payout Ratio76.82%79.46%82.09%84.73%87.36%90.00%92.50%
Projected Dividends (M)34.7636.7538.8240.9743.1945.4948.16

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate1.24%2.24%3.24%
Year 1 PV (M)33.3733.6934.02
Year 2 PV (M)31.9932.6333.27
Year 3 PV (M)30.6531.5732.50
Year 4 PV (M)29.3330.5131.72
Year 5 PV (M)28.0529.4630.93
PV of Terminal Value (M)488.31512.91538.48
Equity Value (M)641.70670.76700.93
Shares Outstanding (M)22.8922.8922.89
Fair Value$28.03$29.30$30.62
Upside / Downside-41.24%-38.58%-35.81%

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