Stem stitch is one of the most basic embroidery stitches and used frequently in different styles of embroidery. Its “sister” stitch, outline stitch, looks extremely similar, but the difference comes in when actually doing these two stitches.
Stem stitch is worked with your thread falling below your needle at all times.
Outline stitch is done with your thread above your needle at all times.
The end results are remarkably similar; the individual stitches just slant in a different direction: downwards in stem stitch (top) and upwards in outline stitch (bottom).
Even working along a curved line, there isn’t much difference between the two stitches beyond the angles of the individual stitches. Stem on the top, outline on the bottom curve.
Have a go at doing the two and you’ll find stem stitch easier to do than outline stitch – well, I find it much easier at any rate. It feels more natural to me and I can see the line I’m working along more easily. The repeated stitch action of stem seems to have a better flow to it, too.
If you’re a beginner embroiderer, stem stitch gives a neater end result with less effort. And if you’re using stem stitch to catch down appliquéd fabric, for some reason the end result is neater than if you use outline stitch.
It’s not a scientific fact, just a personal preference, but stem stitch trumps outline stitch any day.