It's difficult to write this post amid the Corona Virus Pandemic. Providing an up to date account of the Corona Virus from the stock picking side I can deliver beneficial information.
Deaths from the Corona Virus are rising across the USA and are supposed to peak this week. Losing a loved one is difficult and when you’re emotionally fragile and grief-stricken, planning a funeral is even harder. Funeral homes know this. They’re for-profit companies, and their industry is booming thanks to the world’s growing (and grieving) population.
According to the National Directory of Morticians Redbook, the number of funeral homes in the U.S. is:
Approximately 89.2% of funeral homes in the United States are privately owned by families or individuals. The remaining 10.8% are owned by publicly-traded corporations. (Service Corporation International (SCI) owns approximately 10.8% and Carriage Services Inc. and StoneMor Partners own approximately 1% each).2
Since the 1960s, NFDA has calculated the median cost of a funeral with viewing and burial by totaling the costs of the following items: basic services fee, removal/transfer of remains to funeral home, embalming and other preparation of the body (casketing, cosmetology, dressing and grooming), a metal casket, use of facilities and staff for viewing and a funeral ceremony, use of a hearse, use of a service car/van, and a basic memorial printed package (e.g., memorial cards, register book, etc.).
The national median cost of a funeral with viewing and burial for calendar year 2016 was $7,360. If a vault is included, something that is typically required by a cemetery, the median cost is $8,508. The cost does not take into account cemetery, monument or marker costs or miscellaneous cash-advance charges, such as for flowers or an obituary.
Like most for-profit businesses, funeral homes often push their expensive products first. And since many grieving families come in without a plan, it’s easy to upsell them. For example, caskets can cost as much as $10,000 depending on the material and finish you select. And another costly decision is whether or not embalming is important to you. It wasn’t popularized until Abraham Lincoln’s death in 1865. They paraded his body from Washington D.C. to its final resting place in Illinois.
Service Corporation International (NSYE: SCI) – is valued at more than $8 billion and its revenue has almost doubled in the last five years. The company offers a wide range of funeral home services and products.
Carriage Services (NYSE: CSV) – is a leader in the funeral home and cemetery industry. It operates 211 funeral homes and cemeteries in 29 states. The company focuses on growing by decentralization and partnerships.
Hillenbrand (NYSE: HI) – Hillenbrand isn’t a pure funeral home play. But one of its largest businesses, Batesville, has partnered with funeral directors to sell burial caskets and cremation products. The company also provides other technology solutions.
Matthews International Corp (NASDAQ: MATW) – Matthews International provides caskets, cremation equipment and other memorial products. It sells them to cemeteries and funeral homes. The company has about 11,000 employees in more than 25 countries.
StoneMor Partners (NYSE: STON) – StoneMor is the second largest network of funeral homes and cemeteries in the U.S. It operates in 27 states with 90 funeral homes and 322 cemeteries. It’s diversified but it’s struggled to turn a profit over the last few years and the stock has dropped.
These five Funeral stocks are my picks and breakdown of the industry.
Keep it profitable,