MeritValue

STEPAN CO

SCLdata completeness 100%17 fiscal years on file
The thesis, from the filings

STEPAN CO earns about 5% on invested capital, with a roughly flat share count. The applicable estimate puts fair value near $22.8 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$2.35B1$2.77B2$2.33B3$2.18B3$2.33B3
Net income$137.8M4$147.2M5$40.2M6$50.4M6$46.9M6
Operating cash flow$72.1M7$160.8M8$174.9M9$162.1M9$147.9M9
Capital expenditure$194.5M10$301.6M11$260.3M12$122.8M12$122.5M12
Free cash flow (derived)−$122.3M7−$140.8M8−$85.5M9$39.3M9$25.4M9
Total debt$727.2M13$1.17B14$1.31B15$1.25B16$1.25B16
Cash & equivalents$159.2M17$173.8M18$129.8M19$99.7M20$132.7M20
Diluted shares23.3M23.1M22.9M22.9M22.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$543.47
your share of equity
Profit it earned you last year
$20.49
Free cash flow it threw off
$11.08
Debt you’d be carrying
$547.58

10 shares is a claim on $543.47 of net worth that earned you $20.49 and generated $11.08 of cash last year, against $547.58 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
5% avg · 5y
FY21 9%FY22 7%FY23 3%FY24 3%FY25 3%

It earned an average 5% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−2% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 72% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$25.4M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$25.4M
Earnings Power Value
$22.8
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$50.4M
  • growthAssumed0.0%
Graham Number
$50.07
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-022778 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-029079 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-074976 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-022778 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-029079 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-074976 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-022778 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-029079 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-074976 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-022778 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-029079 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-074976 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000950170-23-004933 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-31 · accession 0000950170-24-022778 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-25-029079 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-074976 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0000950170-23-004933 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000950170-24-022778 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000950170-25-029079 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001193125-26-074976 (CashAndCashEquivalentsAtCarryingValue)