Stepan Company (SCL)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 40,204 | 147,153 | 137,804 | 126,770 | 103,129 |
| Total stockholders’ equity | US$ in thousands | 1,216,490 | 1,166,060 | 1,074,190 | 986,693 | 891,783 |
| ROE | 3.30% | 12.62% | 12.83% | 12.85% | 11.56% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $40,204K ÷ $1,216,490K
= 3.30%
Stepping back and examining the Return on Equity (ROE) trend of Stepan Co. over the past five years reveals a notable fluctuation in performance. The ROE stood at a modest 3.30% at the end of 2023, marking a decline compared to the previous year and a departure from the consistently higher figures observed in 2021 and 2022.
The ROE was at its peak in 2021 at 12.83%, followed closely by 2022 at 12.62%, indicating a period of strong profitability and efficiency in leveraging shareholder equity. The slight drop to 12.85% in 2020, from the previous year's 12.56%, was relatively minor and did not significantly impact the overall positive trend observed in those years.
Comparing the current ROE of 3.30% to the historical performance reveals a notable deviation from the higher returns observed in the immediate past. Further analysis would be necessary to determine the underlying factors contributing to this decline, whether stemming from changes in profitability, asset utilization, or financial leverage. It would be prudent for stakeholders to delve deeper into the company's financial performance and strategic direction to better understand the drivers behind this shift in ROE and assess the company's future prospects.
Peer comparison
Dec 31, 2023