ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Stepan Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 2.64%.
As of today (2026-06-24), Stepan Co's WACC % is 8.11%. Stepan Co's ROC % is 2.25% (calculated using TTM income statement data).
Stepan Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Stepan Co (NYSE:SCL) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Stepan Co's WACC % is 8.11%. Stepan Co's ROC % is 2.25% (calculated using TTM income statement data).
Stepan Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Stepan Co ROC % Related Terms
Stepan Co ROC % Historical Data
* Premium members only.
The historical data trend for Stepan Co's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Stepan Co (SCL) has a ROC % of 2.64% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Stepan Co and its competitors.
Is Stepan Co's ROC % too high?
Stepan Co's current ROC % is 2.64%. The Chemicals industry median ROC % is 4.46. Stepan Co's value of 2.64% is 40.8% below this industry median. Overall, Stepan Co has a GF Score™ of 79/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Stepan Co's ROC % compare to ODC and ECVT?
Stepan Co's ROC % of 2.64% can be compared against companies in the Chemicals industry. The industry median ROC % is 4.46. Stepan Co's value of 2.64% is 40.8% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Chemicals company?
The median ROC % among Chemicals companies is 4.46, based on 1,585 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Stepan Co's current ROC % of 2.64% is 40.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Stepan Co and its competitors. For the Chemicals industry, the median ROC % is 4.46 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Stepan Co's current ROC % is 2.64%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Stepan Co stock overvalued right now?
Based on GuruFocus' analysis, Stepan Co (SCL) is currently considered Modestly Undervalued. The stock's GF Value™ is $70.56, compared to a current price of $55.05 — trading 22% below its estimated fair value. The current ROC % is 2.64% and 40.8% below the Chemicals industry median of 4.46. Stepan Co's overall GF Score™ is 79/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Stepan Co (SCL), the current ROC % is 2.64% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Stepan Co (SCL) Overvalued in 2026?
Based on GuruFocus' analysis, Stepan Co stock appears to be undervalued.
The current stock price of $55.05 is trading 22% below its estimated GF Value™ of $70.56.
GuruFocus considers Stepan Co to be Modestly Undervalued.
Key valuation signals for SCL:
ROC %: 2.64%
GF Value™: $70.56 vs. price of $55.05 (22% below fair value)
Industry Position: 40.8% below the Chemicals median
No single metric tells the full story. See the SCL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Stepan Co manufactures and sells a variety of chemicals and chemical-based products. The company organizes itself into three segments based on product type. The surfactants segment, which generates the majority of revenue, sells cleaning agents used in detergents, shampoos, body wash, fabric softeners, toothpastes, and other personal-care products. The polymers segment sells polyurethane used to manufacture rigid foam for thermal insulation, as well as phthalic anhydride used to make plastic components for the construction, automotive, and boating industries. The specialty products segment sells chemicals used in food and flavoring. The majority of Stepan's revenue comes from the United States, followed by France, Poland, the United Kingdom, Brazil, Mexico, and other countries.
79GF Score
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