Stepan Company – Basic Materials Sector Stocks
Oil prices are on the rise. They crossed $80 a few days ago before pulling back a bit due to the scare caused by the Omicron variant of the virus. Higher oil prices generally lead to more production and exploration activities. Companies that supply products to the oilfield industry also benefit when oil prices rise. It may sound counterintuitive because some of these companies make chemicals that use crude oil as a raw material. However, if they can successfully pass on some of the price increase and if volumes go up, then it helps such businesses in the longer run. One such firm is Stepan Company. It has a range of oilfield products like demulsifiers, biocides, and friction reducers. Besides the oilfield industry, Stepan Company also caters to a range of other industries. So, there is not high customer concentration as far as the industry or segment is concerned. It is among the well-established basic materials stock today.
Stepan Announces Q32021 Earnings Numbers
On 20th October 2021, Stepan Company announced its third-quarter 2021 earnings results. Total revenues were up about 30% from $464.4 million in Q32020 to $602.6 million. Net income went up from $33.1 million in Q32020 to $36.9 million. Net income per share on a diluted basis rose from $1.43 in Q32020 to $1.59. Company CEO Quinn Stepan said that increase in raw material prices, as well as supply chain disruptions, were headwinds for the business. He also noted that the company had increased its dividend payout by 9.8% and had continued its streak of consecutively raising dividends for 54 years. Such a track record demonstrated the stability of the business. An investor searching for basic materials sector stocks would want to have a look at Stepan Company.
Basic Materials Stock Today
Stepan Company’s stock is down more than 7% on a 1-month basis. The month in discussion is November 2021. The stock traded at $112 on 30th November and not far from its 52-week low of $109.