Forensic Analysis · Consumer Staples / Food & Beverage · as of Jun 27, 2026

STEPAN CO (SCL)

A forensic read on STEPAN CO built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

C · Mixed — selective

Forensic grade

Safe

Financial health

3.7

Altman Z-score

Clean

Earnings quality

Forensic signals

-1.1%

ROE

$1.3B

Market cap

2.87%

Dividend yield

STEPAN CO earns a C (Mixed — selective) forensic quality grade, and its Altman Z-score is 3.7, placing it in the Safe zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.

What the filings flag

3%Return on invested capital. Return on invested capital is 3% and slipping from 9% — well below its ~8% cost of capital, so reinvested dollars may be destroying value, not building it.

-0.3%/yrShare-count dilution. Diluted share count changed -1% over the last 3 years to FY2025 (-0.3%/yr). Roughly flat — buybacks are about offsetting stock comp, not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.

0% of revStock-based comp load. Stock-based compensation ran 0% of revenue and 24% of free cash flow in FY2025 — about $0.26 per diluted share. Meaningful — reported free cash flow flatters the economics, since SBC is a real cost paid in shares.

138% of FCFShareholder returns. Returned $35M to shareholders (buybacks + dividends) in FY2025 — 138% of free cash flow, but 24% of operating cash flow. Returns run ahead of free cash flow because the business is also funding heavy growth capex (usually debt-financed); the payout itself is covered by operating cash — sustainable as long as that spending is genuine expansion, not upkeep.

$9MGoodwill impairments. Took $9M of goodwill writedowns across 3 year(s) (FY2022 ($978,000), FY2023 ($2M), FY2025 ($6M)) — about 3% of net income over the span. Writedowns mean past acquisitions underperformed what was paid for them — worth weighing on capital-allocation skill.

Key fundamentals

Net Margin2.0%

Debt / Equity0.50x

Free Cash Flow$25.4M

Latest Revenue$2.33B

Return on Equity3.8%

Revenue Growth YoY+7.0%

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🔒Peer comparison + filing-change monitoring & alerts

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Data from SEC EDGAR public filings · metrics as of Jun 27, 2026. Forensic signals flag probability, not certainty.