Analyzing Stepan (NYSE:SCL) & ICL Group (NYSE:ICL)

ICL Group (NYSE:ICL) and Stepan (NYSE:SCL) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Volatility & Risk

ICL Group has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Stepan has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Valuation & Earnings

This table compares ICL Group and Stepan”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ICL Group	$7.15 billion	1.06	$226.00 million	$0.24	24.42
Stepan	$2.33 billion	0.62	$46.90 million	($0.12)	-529.67

ICL Group has higher revenue and earnings than Stepan. Stepan is trading at a lower price-to-earnings ratio than ICL Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

13.4% of ICL Group shares are held by institutional investors. Comparatively, 82.7% of Stepan shares are held by institutional investors. 0.3% of ICL Group shares are held by insiders. Comparatively, 6.6% of Stepan shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares ICL Group and Stepan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ICL Group	3.95%	8.40%	4.19%
Stepan	-0.11%	3.90%	2.01%

Dividends

ICL Group pays an annual dividend of $0.17 per share and has a dividend yield of 2.9%. Stepan pays an annual dividend of $1.58 per share and has a dividend yield of 2.5%. ICL Group pays out 70.8% of its earnings in the form of a dividend. Stepan pays out -1,316.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Stepan has raised its dividend for 57 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for ICL Group and Stepan, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ICL Group	0	2	0	0	2.00
Stepan	1	1	0	0	1.50

ICL Group currently has a consensus price target of $6.00, suggesting a potential upside of 2.39%. Given ICL Group’s stronger consensus rating and higher possible upside, research analysts clearly believe ICL Group is more favorable than Stepan.

Summary

ICL Group beats Stepan on 12 of the 16 factors compared between the two stocks.

About ICL Group

ICL Group Ltd, together with its subsidiaries, operates as a specialty minerals and chemicals company worldwide. It operates in four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions. The Industrial Products segment produces bromine out of a solution that is a by-product of the potash production process, as well as bromine-based compounds; produces various grades of potash, salt, magnesium chloride, and magnesia products; and produces and markets phosphorous-based flame retardants and other phosphorus-based products. The Potash segment extracts potash from the Dead Sea; mines and produces potash and salt; produces polysulphate; produces, markets, and sells magnesium and magnesium alloys, as well as related by-products, including chlorine and sylvinite; and sells salt. The Phosphate Solutions segment uses phosphate commodity products to produce specialty products; produces and markets phosphate-based fertilizers, as well as sulphuric acid, green phosphoric acid, and phosphate fertilizers; and manufactures thermal phosphoric acid for various industrial end markets, such as oral care, cleaning products, paints and coatings, water treatment, asphalt modification, construction, and metal treatment. It also develops and produces functional food ingredients and phosphate additives for use in the processed meat, poultry, seafood, dairy, beverage, and baked goods markets; and produces milk and whey proteins for the food ingredients industry. The Growing Solutions segment develops, manufactures, markets, and sells fertilizers based primarily on nitrogen, potash, and phosphate, including water soluble specialty, liquid, soluble, and controlled-release fertilizers. It sells its products through marketing companies, agents, and distributors. The company was formerly known as Israel Chemicals Ltd. and changed its name to ICL Group Ltd in May 2020. The company was founded in 1968 and is headquartered in Tel Aviv, Israel.

About Stepan

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products worldwide. It operates through three segments: Surfactants, Polymers, and Specialty Products. The Surfactants segment offers surfactants that are used in consumer and industrial cleaning and disinfection products, including detergents for washing clothes, dishes, carpets, and floors and walls, as well as shampoos and body washes; and other applications, such as fabric softeners, germicidal quaternary compounds, disinfectants, and lubricating ingredients. Its surfactants are also used in various applications, including emulsifiers for spreading agricultural products; and industrial applications comprising latex systems, plastics, and composites. The Polymers segment provides polyurethane polyols that are used in the manufacture of rigid foam for thermal insulation in the construction industry, as well as a base raw material for coatings, adhesives, sealants, and elastomers (CASE); polyester resins, including liquid and powdered products, which are used in CASE applications; and phthalic anhydride that is used in unsaturated polyester resins, alkyd resins, and plasticizers for applications in construction materials, as well as components of automotive, boating, and other consumer products. The Specialty Products segment offers flavors, emulsifiers, and solubilizers for use in food, flavoring, nutritional supplement, and pharmaceutical applications. Stepan Company was founded in 1932 and is headquartered in Northbrook, Illinois.