Stepan Company (SCL)
Return on equity (ROE)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | 40,204 | 52,231 | 79,044 | 118,486 | 147,153 | 153,314 | 150,850 | 142,002 | 137,804 | 105,641 | 101,889 | 94,318 | 81,252 | 118,458 | 111,179 | 105,690 | 103,129 | 105,048 | 100,913 | 104,149 |
| Total stockholders’ equity | US$ in thousands | 1,216,490 | 1,202,770 | 1,215,100 | 1,189,910 | 1,166,060 | 1,130,240 | 1,125,710 | 1,116,740 | 1,074,190 | 1,057,300 | 1,048,800 | 1,002,280 | 986,693 | 938,193 | 897,429 | 866,778 | 891,783 | 854,209 | 857,658 | 831,447 |
| ROE | 3.30% | 4.34% | 6.51% | 9.96% | 12.62% | 13.56% | 13.40% | 12.72% | 12.83% | 9.99% | 9.71% | 9.41% | 8.23% | 12.63% | 12.39% | 12.19% | 11.56% | 12.30% | 11.77% | 12.53% |
December 31, 2023 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $40,204K ÷ $1,216,490K
= 3.30%
The return on equity (ROE) for Stepan Co. has shown a decreasing trend over the last two years, declining from 13.56% in Q3 2022 to 3.30% in Q4 2023. This downward trend indicates a decrease in the company's ability to generate profit from the shareholders' equity.
The ROE dipped significantly from Q1 2023 to Q4 2023, from 9.96% to 3.30%, suggesting possible challenges in profitability and efficiency during the last quarter of 2023. The company's ROE reached its peak in Q4 2022 at 12.62% before beginning to decline steadily.
A lower ROE can be attributed to various factors such as declining profitability, decreased asset turnover, or increasing financial leverage. Investors and stakeholders may be concerned about the declining trend in ROE as it signifies a reduced effectiveness in utilizing equity to generate profit.
Further analysis into the company's financial performance, operational efficiency, and strategic decisions will be necessary to identify the root causes of the declining ROE and to implement appropriate measures to improve the company's profitability and shareholder returns.
Peer comparison
Dec 31, 2023