Stepan Company (SCL): Price and Financial Metrics

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SCL Price/Volume Stats

Stepan Company (SCL) Company Bio

Stepan Chemical is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. Stepan is a leading merchant producer of surfactants, which are the key ingredients in consumer and industrial cleaning compounds. The Company is also a leading supplier of Polyurethane polyols used in the expanding thermal insulation market, and C.A.S.E. (Coatings, Adhesives, Sealants, and Elastomers) industries. The company was founded in 1932 and is based in Northfield, Illinois.

SCL Price Forecast Based on DCF Valuation

We started the process of determining a valid price forecast for Stepan Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Stepan Co ranked in the 51th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 16.33%. The most interesting components of our discounted cash flow analysis for Stepan Co ended up being:

• Interest coverage, a measure of earnings relative to interest payments, is 32.46; that's higher than 89.27% of US stocks in the Basic Materials sector that have positive free cash flow.
• The business' balance sheet suggests that 8% of the company's capital is sourced from debt; this is greater than only 24.12% of the free cash flow producing stocks we're observing.
• SCL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 37.59% of tickers in our DCF set.

For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as SCL, try GCP, MLM, TSE, RGLD, and ARLP.