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SCI

Service Corporation International NYSE:SCI Stock Report

Last Price

US$57.74

Market Cap

US$9.1b

7D

-0.4%

1Y

-5.0%

Updated

02 Oct, 2022

Data

Company Financials +

Service Corporation International Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Service Corporation International
Historical stock prices
Current Share PriceUS$57.74
52 Week HighUS$75.12
52 Week LowUS$56.85
Beta0.76
1 Month Change-6.24%
3 Month Change-17.51%
1 Year Change-4.96%
3 Year Change23.91%
5 Year Change67.02%
Change since IPO974.23%

Recent News & Updates

Sep 15

Service Corporation International: Feeling Minimal Pressures

Summary The themes are that COVID-19 pulled forward mortality, making 2020 and 2021 strong years for Service Corporation International. There is also commentary around reduced discretionary spending, which is affecting the very cash and margin generative pre-need business and merchandise and services. Nonetheless, the pressures are quite small and baby boomers are still entering the high mortality ages. Also, US fertility is way better than many other western economies including Europe, so it's the right geography to get exposure. The multiple is low and the outlook is very solid for decades, making SCI a buy. Published on the Value Lab 5/9/22 We continue to build coverage in the death care sector with Service Corporation International (SCI), probably the largest player in the US. It benefits relative to other geographies from solid US demographics, and the negative effects expected from strong comps were better than expected. The business is cash generative, and with both a strong medium-term and secular-term outlook, as well as a resilient short-term outlook, it looks like a solid value play. Quick Primer First, a quick primer on the business. They sell interment rights, so essentially leases, on their cemetery properties to customers on both an at-need and a pre-need basis, meaning either after someone's death or in anticipation of eventual death. In their cemetery merchandise and services, they floral services for the graves and other graveside services. They also provide funeral services, including cremation in addition to the cemetery arrangements, but also selling caskets or urns. The segment reporting is shown below. 10-K 2021 Segments (sec.gov) Here are some useful points about the economics of the business. When they sell on a pre-need basis, they create pre-need deferred revenue. This accounts for both cemetery and funeral segments. Naturally, once the services are rendered, revenue is recognised and the deferred revenue liability is nixed. In the meantime, it is a great source of cash flow, but cannot be used for working capital purposes. Much if not all of these pre-need sales are kept in trust funds, seen in the liabilities as deferred receipts held in trust, as per provincial or state law. The rest are deferred revenue, which reduces working capital as normal. If pre-need contracts are cancelled, the amounts retained by the company get recognized as revenue, including gains made on that portion of the funds in trust. This can all be considered a type of backlog, provided by pre-need sales activity. 10-Q2 Balance Sheet (sec.gov) For the cemetery segment, it is basically a real estate business. They own 90% of their cemetery property and lease the rest. They in turn sell interment rights to customers for the place of memorial to remain. These are lump-sum sales that partially go into a perpetual care trust for upkeep of the cemetery according to local law, which is a liability. The part that goes into the trust is not recognized as revenue while the rest is. The trust is also invested in order to outpace the liability of the needs of the interments and to generate a profit. The investment returns from the trusts are recognized as cemetery segment revenue when distributed and help cover cemetery maintenance expenses. So essentially, the business model covers them for maintenance costs. Part of the COGS from cemeteries are property construction costs, in addition to all the other typical COGS-related costs that most other businesses would have, including labor and facility expenses. The company also sometimes acts as an agent for selling life insurance policies on top of the sale of a pre-need contract. They earn commissions from insurance companies for this, and it comes in as general agency commissions. Q2 Results The Q2 Results are demonstrated as above and as follows. Segment Results (sec.gov) Funeral revenue rises, driven by the cash-generative pre-need segment. A good performance. The cemetery revenue actually falls. Merchandise and services fall, having an amplified effect on the gross profits as it is a higher margin segment. Pre-need revenues fall slightly, showing a resilience in volumes just not mix. Volumes, in general, are falling a little, while the average sale price is increasing. This is a key effect that is coming from the mortality pull-forward due to COVID-19, which really strengthened 2021 in particular, especially since funerals were slowed down by lockdowns. The reason the average sale is increasing is because more people are attending a given funeral. So larger rooms are being booked and larger services with more catering. Amusingly, funeral businesses are actually a reopening trade. On top of that, the company is beginning to pass along higher costs to consumers. As far as we're concerned, they will be able to stay ahead of inflation easily with pricing. On the flip side, cremations are growing, and that tends to be less favourable for the mix. In general, management thinks that the flattish results are below their expectations and that the volumes being primarily affected are those related to discretionary spending. Funerals overall are not exactly discretionary, but some of the high contributors like merchandise are. To some extent, consumers are beginning to save on their funerals. Large sales are still growing, but it's in the more discounted services that we are seeing a bit of downtrading.

Aug 24
With EPS Growth And More, Service Corporation International (NYSE:SCI) Makes An Interesting Case

With EPS Growth And More, Service Corporation International (NYSE:SCI) Makes An Interesting Case

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

SCIUS Consumer ServicesUS Market
7D-0.4%0.3%-2.5%
1Y-5.0%-30.6%-23.2%

Return vs Industry: SCI exceeded the US Consumer Services industry which returned -30.6% over the past year.

Return vs Market: SCI exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is SCI's price volatile compared to industry and market?
SCI volatility
SCI Average Weekly Movement3.9%
Consumer Services Industry Average Movement8.5%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: SCI is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: SCI's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
196220,840Tom Ryanhttps://www.sci-corp.com

Service Corporation International provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments. Its funeral service and cemetery operations comprise funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other businesses.

Service Corporation International Fundamentals Summary

How do Service Corporation International's earnings and revenue compare to its market cap?
SCI fundamental statistics
Market CapUS$9.10b
Earnings (TTM)US$768.54m
Revenue (TTM)US$4.18b

11.8x

P/E Ratio

2.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SCI income statement (TTM)
RevenueUS$4.18b
Cost of RevenueUS$2.89b
Gross ProfitUS$1.29b
Other ExpensesUS$522.87m
EarningsUS$768.54m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)4.87
Gross Margin30.89%
Net Profit Margin18.38%
Debt/Equity Ratio211.6%

How did SCI perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

20%

Payout Ratio