Is This Dividend King Worth a Buy Today?

Stepan Company (NYSE:SCL) stock fell 1.32% on August 20. The company is a manufacturer of specialty chemicals. It is noteworthy as the only plant in the United States authorized by the Drug Enforcement Administration (DEA) to import coca leaves.

Why are we focusing on Stepan today? It is one of the only dividend kings listed in the U.S. market. That is, it has achieved at least 50 consecutive years of dividend growth. The bond yield collapse is forcing investors to explore other income options. Dividend stocks that have a long history of payouts is one avenue to consider in this shaky period.

Stepan released its second-quarter 2019 results on July 24. Adjusted net income rose to $35.1 million or $1.50 per diluted share compared to $32.2 million or $1.39 per diluted share in Q2 2018.

Foreign currency fluctuations negatively impacted net income by $0.06 million or $0.03 per diluted share in the quarter. For the first half of 2019 adjusted net income has been mostly flat compared to the prior year.

Record rainfall in the United States in the first half of 2019 had a negative impact on Surfactant operating income, as did the Ecatepec equipment failure. Even still, Stepan was able to produce comparable year-over-year adjusted profit.

Stepan last paid out a quarterly dividend of $0.25 per share. This represents a modest 1% yield. The company has achieved dividend-growth for 51 consecutive years.

Still, Stepan is pricey in late August. The stock had a price-to-earnings ratio of 21 as of close on August 20 and a price-to-book of 2.4. Income investors should await a more favourable entry point before pulling the trigger.