Stepan Co.

Company Description

Stepan Company produces specialty and intermediate chemicals which are sold to other manufacturers and then made into a variety of end products. They have three reportable segments: surfactants, polymers and specialty products.

Income Up 73%

Stepan reported first-quarter results on Apr 21 that included net income of $15.2 million, up 73% from $8.7 million. Earnings per share were $1.13, which beat the consensus by 39 cents, or 53%. This was the company's second consecutive surprise.

Estimates Spike

Following the earnings report, the consensus estimate for full-year 2009 rose 8 cents to $2.77, or a 13% year-over-year earnings growth rate. The estimate for 2010 is now $3.30, up 21 cents and representing a 19% growth rate.

Shares are trading with solid valuations. The forward P/E is just under 13 times. The stock is currently carrying a PEG ratio of 0.9.

The Chart

SCL has climbed steadily through late winter and early spring. However, shares have recently hit resistance near $41. Take a look at the chart below.