NORTHBROOK, Ill. - Stepan Company (NYSE: NYSE:SCL), a global manufacturer of specialty and intermediate chemicals, announced an increase in its quarterly cash dividend. The Board of Directors approved a $0.01 per share rise, a 2.7% increase, resulting in a dividend of $0.385 per share payable on December 13, 2024, to shareholders of record as of November 29, 2024. This marks the 57th consecutive year of dividend growth for the company.
Stepan Company, with its headquarters in Northbrook, Illinois, operates a network of production facilities across North and South America, Europe, and Asia. The company is known for producing surfactants, which are essential components in cleaning and disinfection products, as well as agricultural and oilfield solutions. Additionally, Stepan is recognized as a key supplier of polyurethane polyols for thermal insulation and the CASE industries.
The company's forward-looking statements, which include plans, objectives, and financial outlooks, are subject to a variety of risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, accidents, unplanned production shutdowns, reduced demand, compliance with laws, competition, raw material and energy cost volatility, transportation disruptions, economic downturns, international business risks such as currency fluctuations, litigation, intellectual property rights maintenance, capital market access, political instability, expansion costs, information technology system breaches, executive management retention, and debt covenants.
While the company has expressed confidence in its strategies and performance, it acknowledges that the forward-looking statements are not guarantees of future performance and that investors should not rely unduly on these projections. Stepan Company has committed to not updating or revising these statements unless new information or future events make it necessary.
This dividend increase announcement is based on a press release statement from Stepan Company. The information provided offers shareholders insight into the company's consistent dividend policy and its operational focus areas. Stepan's stock is publicly traded on the New York Stock Exchange under the ticker SCL.
In other recent news, Stepan Company has seen noteworthy developments. Luis E. Rojo has been appointed as the new President and CEO, succeeding Scott R. Behrens. Rojo's promotion is complemented by Samuel S. Hinrichsen stepping up as the interim Chief Financial Officer.
Meanwhile, Stepan has amended its existing credit agreements with New York Life and Prudential (LON:PRU), raising its borrowing capacity to $175 million and $225 million respectively, and extending the issuance period end date to August 27, 2027.
In the company's Q2 2024 earnings call, Stepan reported a 4% rise in adjusted EBITDA to $47.7 million and an equivalent increase in global sales volume. The Surfactants division showcased double-digit volume growth. The company also revealed a criminal social engineering scheme but foresees a minimal impact on its operations.
Furthermore, Stepan is on track to meet its $50 million cost reduction target for 2024. The company's new alkoxylation production facility in Pasadena, Texas is nearing completion and is projected to start operations in the fourth quarter. These recent developments demonstrate Stepan's ongoing resilience and strategic growth.
InvestingPro Insights
Stepan Company's recent dividend increase aligns with its impressive track record of dividend growth. According to InvestingPro Tips, the company has raised its dividend for 53 consecutive years and maintained dividend payments for 54 consecutive years. This consistency in dividend growth underscores Stepan's commitment to shareholder returns, even in challenging market conditions.
Despite the positive dividend news, InvestingPro data reveals that Stepan's revenue growth has been negative, with a -14.57% decline in the last twelve months as of Q2 2024. This contraction in revenue may explain why the stock is currently trading near its 52-week low, as indicated by another InvestingPro Tip.
The company's P/E ratio stands at 47.55, suggesting that investors are still pricing in growth expectations despite recent revenue challenges. This high valuation multiple could be attributed to Stepan's strong dividend history and analysts' predictions that the company will remain profitable this year, as noted in the InvestingPro Tips.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 8 more tips available for Stepan Company. These tips could provide valuable context for understanding the company's financial health and market position in light of its recent dividend announcement.
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