Stepan Just Raised Its Dividend for the 59th Straight Year. Most Investors Have Never Heard of It
A company most investors have never heard of just extended one of the longest dividend growth streaks in market history, and it does it by making an ingredient found in almost every cleaning product in your home.
Most investors couldn’t name the company behind the cleaning agent in their dish soap. Stepan Company (NYSE:SCL) makes it. On October 28, 2026, Stepan Company declared a quarterly dividend of $0.405 per share, up from $0.395, marking the 59th straight year of increases. The step-up is about 2.5%, which is typical for Stepan.
Stepan’s dividend records run back to 1999 and show the payout rising every year in that stretch. The quarterly rate rose from $0.16 in 2013 to the new $0.405, a gain of about 153%. A run of 50 or more years makes Stepan a Dividend King, even though the whole company is worth only about $1.48 billion.
What Stepan Actually Makes
Stepan is an ingredient supplier and sells nothing under its own consumer brand. Its biggest business is surfactants, the active cleaning agents in laundry detergent, dish soap, shampoo, disinfectants, farm sprays, and oilfield fluids. Surfactants brought in $486.6 million in third-quarter revenue. The second business is polymers. These are mostly polyols used in rigid foam and spray foam insulation for buildings, as well as in coatings, adhesives, and sealants. That segment added $178.7 million. A smaller specialty products unit, which includes medium-chain triglycerides used in food and nutrition, added $26.9 million.
Customers tend to stay. Once a detergent maker builds a formula around a particular surfactant, changing suppliers usually means testing and requalifying the product. Most brand owners would rather avoid that to save a little on a minor input. People also keep washing clothes and dishes when the economy slows, and insulation demand is supported in part by building energy codes.
How Stepan Handled the 2009 Downturn and 2020
The financial crisis is a good test. In 2009, revenue fell about 20% from 2008. Some of that was lower raw-material costs being passed back to customers. Profits still went up:
| Metric | 2008 | 2009 |
|---|---|---|
| Revenue | $1,600,130,000 | $1,276,382,000 |
| Gross profit | $169,537,000 | $233,103,000 |
| Net income | $37,172,000 | $63,049,000 |
| Operating cash flow | $29,130,000 | $166,441,000 |
| Dividends paid | $8,863,000 | $9,557,000 |
Gross margin went from about 10.6% to about 18.3%. The pandemic year followed a similar trend. Revenue in 2020 was $1,869,750,000, a little above 2019’s $1,858,745,000. Gross margin rose from about 18.3% to about 20.5%, and net income rose to $126,770,000 as demand for cleaning and disinfection products jumped.
Price Increases Backed by the Numbers
Stepan has shown it can raise prices to cover its costs. In the third quarter of 2026, selling prices rose 13% from a year earlier, “primarily due to pass-through of higher raw material costs and pricing actions.” Volume held steady. Surfactant organic volume grew 8%, and surfactant adjusted EBITDA rose 27% to $48.2 million. Company-wide, revenue was $692.15 million and adjusted EPS was $0.94, both above estimates. Chief Executive Luis E. Rojo said, “We believe we will deliver full-year Adjusted EBITDA growth, positive free cash flow, and continue to de-leverage the balance sheet in 2026.”
A Modest Yield With Solid Cover
The new annual rate works out to a yield of about 2.4% at a recent price of $66.39. The income is modest. Dependability is the bigger draw. In 2025, Stepan paid $35,029,000 in dividends, about 23.7% of its $147,882,000 in operating cash flow. Measured against net income, the payout ratio was about 74.7%, which is higher. Total debt was $707,349,000 at midyear, about 0.58 times shareholders’ equity. In October, Stepan sold land near Millsdale, Illinois, for $28.5 million and used the money to pay down debt.
The stock has been volatile. It is up 43.25% this year but still down 38.58% over five years, and up only 10.84% in price over ten years.
One Risk Worth Watching: Raw Material Swings
Many of Stepan’s raw materials are oleochemicals made from palm and coconut oil, and their prices can jump faster than Stepan can raise its own. In the first quarter of 2026, surfactant-adjusted EBITDA fell 15% because cost increases ran ahead of price increases. Cash flow has been tight too. Free cash flow was about $25.4 million in 2025, less than the dividend bill, as capital spending reached $122,514,000. Third-quarter free cash flow fell to $8.2 million. Project Catalyst, the company’s restructuring program, is expected to cost $75 million to $80 million in pre-tax charges this year, with a target of about $100 million in pre-tax savings over two years. Whether those savings show up is worth following across coming earnings reports.
Built to Last Through Every Downturn
Stepan makes the cleaning and insulation chemicals inside everyday products, and it has handled recessions better than its small size might suggest. The yield is modest, and cash flow has been higher lately. Through 2009 and 2020, though, the dividend went up every year. For investors who want more names with that kind of multi-decade run, we ranked ten of them by valuation in a free Dividend Kings report.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
