DCF Tool

SCL

Stepan Co. – Other Basic Inorganic Chemical Manufacturing
Stepan Company 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 and disinfection products and in agricultural and oilfield solutions. The Company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries.
Analysis Results
Intrinsic Value $194.81
Latest Price $111.89
Relative Value 43% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 11.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 154 145
2023 172 151
2024 193 159
2025 215 166
2026 241 174
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5220 million. This corresponds to a present value of 3540 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 795 million. Adding in the terminal value gives a total present value of 4330 million.

There are presently 22.2 million outstanding shares, so the intrinsic value per share is 194.81.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 913,368,000
Current Cash 159,186,000
Current Liabilities 500,476,000
Current Debt 40,718,000
Non-Cash Working Capital (NCWC) 294,424,000
Change in NCWC 117,408,000
EBIT 181,029,000
Tax Provision 34,642,000
Depreciation and Amortization 90,876,000
Capital Expenditure -194,482,000
Unlevered Free Cash Flow 158,483,975
Current Assets 905,651,000
Current Cash 349,938,000
Current Liabilities 416,554,000
Current Debt 37,857,000
Non-Cash Working Capital (NCWC) 177,016,000
Change in NCWC -10,847,000
EBIT 182,722,000
Tax Provision 43,411,000
Depreciation and Amortization 81,860,000
Capital Expenditure -125,792,000
Unlevered Free Cash Flow 81,574,356
Current Assets 818,789,000
Current Cash 315,383,000
Current Liabilities 339,114,000
Current Debt 23,571,000
Non-Cash Working Capital (NCWC) 187,863,000
Change in NCWC -12,949,000
EBIT 145,144,000
Tax Provision 22,798,000
Depreciation and Amortization 78,701,000
Capital Expenditure -105,572,000
Unlevered Free Cash Flow 79,041,083
Current Assets 802,530,000
Current Cash 300,194,000
Current Liabilities 338,582,000
Current Debt 37,058,000
Non-Cash Working Capital (NCWC) 200,812,000
Change in NCWC 8,723,000
EBIT 151,678,000
Tax Provision 27,173,000
Depreciation and Amortization 81,115,000
Capital Expenditure -86,647,000
Unlevered Free Cash Flow 125,413,182
Current Assets 788,736,000
Current Cash 298,894,000
Current Liabilities 320,253,000
Current Debt 22,500,000
Non-Cash Working Capital (NCWC) 192,089,000
Change in NCWC 1,402,000
EBIT 154,086,000
Tax Provision 47,690,000
Depreciation and Amortization 79,022,000
Capital Expenditure -78,613,000
Unlevered Free Cash Flow 103,121,075
Current Assets 685,541,000
Current Cash 225,743,000
Current Liabilities 297,265,000
Current Debt 28,154,000
Non-Cash Working Capital (NCWC) 190,687,000
Change in NCWC -28,305,000
EBIT 150,062,000
Tax Provision 27,618,000
Depreciation and Amortization 74,967,000
Capital Expenditure -103,076,000
Unlevered Free Cash Flow 57,234,733
Current Assets 619,573,000
Current Cash 176,143,000
Current Liabilities 243,244,000
Current Debt 18,806,000
Non-Cash Working Capital (NCWC) 218,992,000
Change in NCWC -48,870,000
EBIT 119,443,000
Tax Provision 26,819,000
Depreciation and Amortization 66,985,000
Capital Expenditure -119,349,000
Unlevered Free Cash Flow -12,934,947
Current Assets 575,556,000
Current Cash 85,215,000
Current Liabilities 249,513,000
Current Debt 27,034,000
Non-Cash Working Capital (NCWC) 267,862,000
Change in NCWC 26,275,000
EBIT 89,695,000
Tax Provision 18,454,000
Depreciation and Amortization 63,804,000
Capital Expenditure -101,819,000
Unlevered Free Cash Flow 56,041,562
Current Assets 608,550,000
Current Cash 133,347,000
Current Liabilities 268,993,000
Current Debt 35,377,000
Non-Cash Working Capital (NCWC) 241,587,000
Change in NCWC 9,713,000
EBIT 104,857,000
Tax Provision 23,293,000
Depreciation and Amortization 56,400,000
Capital Expenditure -92,865,000
Unlevered Free Cash Flow 52,564,540
Current Assets 523,078,000
Current Cash 76,875,000
Current Liabilities 247,167,000
Current Debt 32,838,000
Non-Cash Working Capital (NCWC) 231,874,000
Change in NCWC 34,970,000
EBIT 123,992,000
Tax Provision 36,035,000
Depreciation and Amortization 51,294,000
Capital Expenditure -83,159,000
Unlevered Free Cash Flow 88,486,781

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