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SXT, Sensient Technologies

Chemicals capital-intensive

Sensient Technologies is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients.

Uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, and personal care industries.

The Company's customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world's best-known brands.

Latest annual: FY2025 10-K

SXT · Sensient Technologies

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.6B

+3.5% YoY · 4% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.7B 5-yr avg $1.5B

Gross margin 34% 5-yr avg 33%

Operating margin 13.3% 5-yr avg 12.4%

ROIC 9% 5-yr avg 8%

Owner-earnings margin 4% 5-yr avg 4%

Free cash flow margin 1% 5-yr avg 3%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Flavors and Extracts (47%), Color (42%) and Asia Pacific (10%).
What moves the needle: Gross margin has run about 33% and operating margin about 12% through the cycle, a solid spread between what it charges and what the product costs to make. Inventory runs near 34% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the spread and utilization. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 9%). By owner earnings: roughly 6% of revenue reaches owners as cash, though it swings. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

The largest slice of sales is Flavors And Extracts at 47%, but the profit engine is Color: 42% of revenue and 51% of segment operating profit.

Revenue by reportable segment, FY2025

Operating profit same segments

Flavors And Extracts47%$764M36% of profit
Color42%$680M51% of profit
Asia Pacific10%$168M13% of profit

By geographyNorth America58%Europe20%Asia Pacific15%Other7%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$1.4B	$1.4B	$1.4B	$1.3B	$1.3B	$1.4B	$1.4B	$1.5B	$1.6B	$1.6B	$1.7B	RevenueRevenue
34%	35%	—	—	32%	33%	34%	32%	33%	33%	34%	Gross marginGross mgn
21%	23%	19%	22%	20%	21%	20%	21%	20%	21%	21%	SG&A / revenueSG&A/rev
3%	3%	3%	3%	3%	2%	3%	3%	3%	3%	3%	R&D / revenueR&D/rev
$186M	$168M	$203M	$121M	$153M	$170M	$197M	$155M	$192M	$207M	$220M	Operating incomeOp. inc.
13.4%	12.3%	14.7%	9.2%	11.5%	12.3%	13.7%	10.6%	12.3%	12.8%	13.3%	Operating marginOp. mgn
$126M	$90M	$157M	$82M	$109M	$119M	$141M	$93M	$125M	$134M	$144M	Net incomeNet inc.
26%	40%	13%	19%	21%	25%	23%	28%	23%	24%	24%	Effective tax rateTax rate
											Cash flow & returns
$184M	$36M	$84M	$177M	$219M	$145M	$12M	$170M	$157M	$128M	$123M	Operating cash flowOp. cash
$47M	$49M	$53M	$55M	$50M	$52M	$52M	$58M	$60M	$61M	$62M	DepreciationDeprec.
$3M	($108M)	($128M)	$41M	$54M	($35M)	($197M)	$10M	($38M)	($82M)	($97M)	Working capital & otherWC & other
$81M	$56M	$51M	$39M	$52M	$61M	$79M	$88M	$59M	$89M	$101M	CapexCapex
5.9%	4.1%	3.7%	3.0%	3.9%	4.4%	5.5%	6.0%	3.8%	5.5%	6.1%	Capex / revenueCapex/rev
$137M	($20M)	$33M	$138M	$167M	$84M	($40M)	$112M	$98M	$67M	$62M	Owner earningsOwner earn.
9.9%	−1.5%	2.4%	10.4%	12.5%	6.1%	−2.8%	7.7%	6.3%	4.1%	3.7%	Owner earnings marginOE mgn
$102M	($20M)	$33M	$138M	$167M	$84M	($67M)	$82M	$98M	$38M	$22M	Free cash flowFCF
7.4%	−1.5%	2.4%	10.4%	12.5%	6.1%	−4.7%	5.6%	6.3%	2.4%	1.3%	Free cash flow marginFCF mgn
$0	$0	$31M	$0	$0	$14M	$23M	$2M	$0	$5M	$518K	AcquisitionsAcquis.
$50M	$54M	$57M	$62M	$66M	$67M	$69M	$69M	$69M	$70M	$70M	Dividends paidDiv. paid
$50M	$87M	$77M	$0	$0	$43M	$0	$0	—	—	—	BuybacksBuybacks
10%	7%	12%	7%	8%	9%	9%	7%	9%	8%	9%	ROICROIC
15%	11%	18%	9%	12%	13%	14%	9%	12%	11%	12%	Return on equityROE
9%	4%	12%	2%	5%	6%	7%	2%	5%	5%	6%	Retained to equityRetained/eq
											Balance sheet
$26M	$29M	$32M	$21M	$25M	$26M	$21M	$29M	$27M	$37M	$39M	Cash & investmentsCash+inv
$195M	$195M	$255M	$213M	$234M	$261M	$302M	$272M	$290M	$305M	$342M	ReceivablesReceiv.
$404M	$464M	$491M	$423M	$381M	$412M	$564M	$598M	$600M	$678M	$682M	InventoryInvent.
$92M	$110M	$132M	$95M	$107M	$126M	$142M	$131M	$139M	$138M	$114M	Accounts payablePayables
$506M	$549M	$614M	$541M	$508M	$547M	$724M	$739M	$751M	$845M	$910M	Operating working capitalOper. WC
$717M	$733M	$823M	$788M	$742M	$741M	$935M	$937M	$962M	$1.1B	$1.1B	Current assetsCur. assets
$214M	$216M	$215M	$201M	$216M	$232M	$272M	$236M	$271M	$264M	$224M	Current liabilitiesCur. liab.
3.4×	3.4×	3.8×	3.9×	3.4×	3.2×	3.4×	4.0×	3.6×	4.1×	5.0×	Current ratioCurr. ratio
$384M	$409M	$416M	$407M	$423M	$420M	$416M	$424M	$412M	$440M	$436M	GoodwillGoodwill
$1.7B	$1.7B	$1.8B	$1.7B	$1.7B	$1.7B	$2.0B	$2.0B	$2.0B	$2.2B	$2.3B	Total assetsAssets
$583M	$604M	$690M	$598M	$527M	$503M	$631M	$645M	$614M	$709M	$768M	Total debtDebt
$557M	$575M	$658M	$577M	$502M	$478M	$610M	$616M	$587M	$673M	$729M	Net debt / (cash)Net debt
10.1×	8.7×	9.3×	6.0×	10.3×	13.6×	13.5×	6.2×	6.7×	7.0×	7.3×	Interest coverageInt. cov.
$836M	$852M	$860M	$882M	$934M	$938M	$1000M	$1.1B	$1.1B	$1.2B	$1.2B	Shareholders’ equityEquity
0.6%	0.4%	0.0%	−0.1%	0.4%	0.7%	1.1%	0.6%	0.6%	0.9%	0.9%	Stock comp / revenueSBC/rev
											Per share
44.8M	44.0M	42.5M	42.3M	42.3M	42.3M	42.2M	42.2M	42.4M	42.6M	42.7M	Shares out (diluted)Shares
$30.85	$30.94	$32.63	$31.28	$31.46	$32.66	$34.04	$34.48	$36.73	$37.85	$38.80	Revenue / shareRev/sh
$2.82	$2.03	$3.70	$1.94	$2.59	$2.81	$3.34	$2.21	$2.94	$3.16	$3.38	EPS (diluted)EPS
$3.05	$-0.46	$0.77	$3.26	$3.93	$2.00	$-0.96	$2.65	$2.31	$1.57	$1.44	Owner earnings / shareOE/sh
$2.28	$-0.46	$0.77	$3.26	$3.93	$2.00	$-1.59	$1.94	$2.31	$0.90	$0.51	Free cash flow / shareFCF/sh
$1.11	$1.23	$1.35	$1.47	$1.56	$1.58	$1.63	$1.64	$1.64	$1.63	$1.63	Dividends / shareDiv/sh
$1.81	$1.28	$1.19	$0.92	$1.23	$1.44	$1.88	$2.08	$1.40	$2.10	$2.37	Cap. spending / shareCapex/sh
$18.64	$19.36	$20.23	$20.84	$22.06	$22.21	$23.68	$24.94	$25.03	$28.02	$28.56	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+2.3%/yr	+3.8%/yr
Owner earnings / share	−7.1%/yr	−16.8%/yr
EPS	+1.3%/yr	+4.1%/yr
Dividends / share	+4.4%/yr	+0.9%/yr
Capital spending / share	+1.7%/yr	+11.2%/yr
Book value / share	+4.6%/yr	+4.9%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

43Mpeak FY2016

ROIC

8%low FY2023

Gross margin

33%low FY2023

Net debt ÷ owner earnings

10.1×peak FY2018

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$67Mowner earningsvs.$134Mnet incomelow FY2022

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $67M of owner earnings, the operating cash left after the $61M it takes just to hold its position. It put $28M more into growth; free cash flow, after that spending, was $38M.

Reported net income$134M

Owner earnings$67M · 4% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$134M	$125M	$93M	$141M	$119M
Depreciation & amortizationnon-cash charge added back	+$61M	+$60M	+$58M	+$52M	+$52M
Stock-based compensationreal costnon-cash, but a real cost	+$14M	+$10M	+$9M	+$16M	+$10M
Working capital & othertiming of cash in and out, other non-cash items	−$82M	−$38M	+$10M	−$197M	−$35M
Cash from operations	$128M	$157M	$170M	$12M	$145M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$61M	−$59M	−$58M	−$52M	−$61M
Owner earnings	$67M	$98M	$112M	($40M)	$84M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$28M	—	−$30M	−$27M	—
Free cash flow	$38M	$98M	$82M	($67M)	$84M
Owner-earnings marginowner earnings ÷ revenue	4%	6%	8%	-3%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $61M, roughly its depreciation, the rate its assets wear out). The other $28M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $14M), owner earnings is nearer $53M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 7.0×

Comfortable

Operating income $207M ÷ interest expense $30M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $673M · 3.2× operating profit

Meaningful net debt

Cash $37M − debt $709M

What this means
Netting $37M of cash and short-term investments against $709M of debt leaves $673M owed, about 3.2× a year's operating profit (3.4× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 253d

Long (60+ days)

DSO 69 + DIO 231 − DPO 47 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 8%

Solid through the cycle

10-yr median, range 7%–12%; 8% latest = NOPAT $157M ÷ invested capital $1.9B

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 8% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 6%

Solid through the cycle

10-yr median margin, range -3%–13%; latest $67M = operating cash $128M − maintenance capex $61M

Industry peers: median 6%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 4% of revenue this year, a 6% median across 10 years. It chose to put $28M more into growth, so free cash flow this year was $38M — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $14M of SBC) leaves $53M.
Are earnings backed by cash? 0.95×

Mostly cash-backed

Cash from ops $128M ÷ net income $134M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 104%

Returned more than it generated

Dividends + buybacks $70M ÷ Owner Earnings $67M

What this means
The company returned more than it generated: against $67M of Owner Earnings, $70M (104%) went back to shareholders, $70M dividends, $0 buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.46×

Expanding

Capex $89M ÷ depreciation $61M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 4.10×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $709M vs $818M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −6%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $2.76/share (latest year $3.16), the averaged base the calculator's gate runs on, and book value is $28.04/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 13% → 12% (3-yr avg ends)

In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.

What this means
Through the cycle the operating margin held roughly steady — about 13% early, 12% lately, median 12%.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +4%/yr

What this means
Owner earnings grew about 4% a year over the record.
Worst year 2019 · 9.2% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −0.6%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Owner’s terms

What this means
The filing reasons in an owner’s terms — per-share, return on capital, the long term — and the record has held; the words and the results are of a piece.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“Our failure to obtain or adequately protect our intellectual property rights (including in response to developments in artificial intelligence technologies), or any change in law or other changes that serve to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness …”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$1.1B

Cash & short-term investments$39M
Receivables$342M
Inventory$682M
Other current assets$59M

Current liabilities$224M

Debt due within a year$232K
Accounts payable$114M
Other current liabilities$109M

Current ratio5.01×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.97×stricter: inventory excluded

Cash ratio0.17×strictest: cash alone against what's due

Working capital$898Mthe cushion left after near-term bills

Debt due this year vs. cash$232K due · $39M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+11.1%the freshest read on whether the business is still growing

Current ratio, recent quarters4.2× → 5.0×

Deeper floors

Tangible book value$773Mequity stripped of goodwill & intangibles

Debt incl. operating leases$808M$40M of it operating leases

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $1.3B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$656M · 50%
Dividends$633M · 48%
Buybacks$257M · 20%

Returned to owners$890M
115% of the owner earnings the business produced over the span, $633M as dividends and $257M as buybacks.
Source of funding−$235M
Reinvestment and shareholder returns ran $235M beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $583M to $768M.
Average price paid for buybacks—
Buybacks ran $257M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−4.8%
The diluted count fell from 45M to 43M, so the buybacks outran the stock issued to staff.
Dividend record$1.63/sh
Paid in 10 of the years on record, the per-share dividend growing about 4% a year. It was never cut over the span.
Return on what it retained15%
Of the earnings it kept rather than paid out ($287M over the span), annual owner earnings (first three years vs last three) grew $42M, so each retained $1 added about 0.15 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$450M20% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity37%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$74Mover 10 years buying other businesses, against $656M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Paul Manning	$7.1M	$13.9M	$84M
2022	Paul Manning	$7.6M	$5.8M	($40M)
2023	Paul Manning	$6.2M	$2.9M	$112M
2024	Paul Manning	$7.8M	$10.1M	$98M
2025	Paul Manning	$8.7M	$16.7M	$67M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$14M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 7% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Sensient Technologies is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 6 tests turned up something to look into; the other 5 came back clean.

Look hereDid receivables and inventory outpace sales?43% → 62% of sales
Receivables and inventory grew from $599M to $1.0B while revenue grew 20%: working capital is climbing faster than sales (43% of revenue then, 62% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Chemicals

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
NEUNewMarket Corp	$2.7B	29%	15.5%	20%	11%
OECOrion S.A.	$1.8B	25%	10.0%	10%	3%
IOSPInnospec	$1.8B	30%	9.3%	10%	6%
SXTSensient Technologies	$1.6B	33%	12.3%	9%	6%
ASIXAdvanSix Inc. Common Stock	$1.5B	11%	4.6%	7%	2%
WLKPWestlake Chemical Partners LP Common	$1.2B	35%	32.0%	—	32%
ALTOAlto Ingredients Inc.	$918M	1%	-1.8%	-7%	0%
REXREX American Resources Corporation	$650M	11%	6.8%	13%	8%
Group median	—	27%	9.6%	10%	6%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Sensient Technologies has delivered.

Today’s price $

Through the cycle, Sensient Technologies earns about $100M on its 6.2% median owner-earnings margin. This year’s 4.1% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($100M) Net of stock comp (−$15M) Steady-state · maintenance capex ($62M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+39%/yr

Owner-earnings growth · ’16→’25+6%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $22M on 43M shares outstanding, per the 10-Q cover, as of 2026-04-22; net debt $729M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($101M) runs well above depreciation ($62M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $62M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh SXT against another business →

Cite: Owner Scorecard, "Sensient Technologies (SXT), the owner's record," https://ownerscorecard.com/c/SXT, data as of 2026-07-09.

Manual order: ← SXI its page in the Manual SYBT →

Industry order: ← SOLS the Chemicals chapter VVV →