Stepan Company (SCL)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 58,613 | 70,074 | 105,216 | 165,047 | 207,336 | 215,642 | 201,196 | 180,213 | 170,781 | 126,389 | 128,571 | 116,537 | 102,627 | 155,513 | 141,084 | 137,526 | 127,260 | 134,220 | 133,399 | 137,720 |
| Long-term debt | US$ in thousands | 401,248 | 422,375 | 438,269 | 453,742 | 455,029 | 466,766 | 383,503 | 397,760 | 322,862 | 232,184 | 196,529 | 160,847 | 160,812 | 170,063 | 184,315 | 198,566 | 198,532 | 207,783 | 207,748 | 239,063 |
| 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 |
| Return on total capital | 3.62% | 4.31% | 6.36% | 10.04% | 12.79% | 13.50% | 13.33% | 11.90% | 12.22% | 9.80% | 10.32% | 10.02% | 8.94% | 14.03% | 13.04% | 12.91% | 11.67% | 12.64% | 12.52% | 12.86% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $58,613K ÷ ($401,248K + $1,216,490K)
= 3.62%
The return on total capital for Stepan Co. has shown a general decreasing trend over the past eight quarters, with values declining from 11.36% in Q4 2022 to 4.12% in Q4 2023. The company's return on total capital peaked at 12.48% in Q3 2022 before gradually decreasing.
The declining trend in return on total capital may indicate a decrease in the company's ability to generate profits from the capital invested in the business. This could be a cause for concern as it signifies that the company may be experiencing challenges in efficiently utilizing its capital resources to generate returns.
Further analysis and investigation into the factors impacting the company's return on total capital, such as changes in profitability, efficiency, or capital structure, would be necessary to determine the underlying causes of the declining trend and to formulate appropriate strategies to address any potential issues.
Peer comparison
Dec 31, 2023