Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Stepan Company (SCL)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$26.58 - $46.94$35.21
Multi-Stage$40.12 - $43.94$42.00
Blended Fair Value$38.61
Current Price$47.70
Upside-19.07%
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 Rate7.26%7.26%7.26%
Growth Rate1.24%2.24%3.24%
Fair Value$26.58$35.21$46.94
Upside / Downside-44.27%-26.18%-1.60%

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 Rate7.26%7.26%7.26%
Growth Rate1.24%2.24%3.24%
Year 1 PV (M)33.9334.2734.60
Year 2 PV (M)33.0933.7434.41
Year 3 PV (M)32.2333.2034.18
Year 4 PV (M)31.3732.6333.92
Year 5 PV (M)30.5032.0433.64
PV of Terminal Value (M)757.47795.62835.30
Equity Value (M)918.59961.501,006.05
Shares Outstanding (M)22.8922.8922.89
Fair Value$40.12$42.00$43.94
Upside / Downside-15.88%-11.95%-7.87%

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