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| Saturday, October 29, 2016 | |
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Chart of the Week: Unstoppable [Growing] Profits Brian Kehm, Financial Research Associate, The Oxford Club No one likes to think about their ultimate demise, but it's a simple fact of life. And publicly traded companies turn death into big business. You probably think of your town's funeral home as a local mom-and-pop shop. Think again... Huge corporations own thousands of little funeral homes. They just keep their original names so no one notices. In fact, there's a good chance that the funeral home located in your town is owned or operated by Service Corp. International (NYSE: SCI). Service Corp. is the largest funeral company in the country. It's valued at more than $5 billion, and as you can see in the chart above, revenue is soaring. Funeral homes' sales growth is natural. The global population increased by 400% in the last 100 years. That's huge! And it provides a steady flow of business to companies like Service Corp. Today, roughly 2.6 million people die in the U.S. each year... but this will continue to pick up speed as the country's population grows and ages. By 2040, that number will be closer to 5 million. It's good news for the death industry. And while it's the largest, Service Corp. isn't your only option for investing in funeral homes. Here are a few others: - Carriage Services (NYSE: CSV) operates in the United States. The company sells funeral home and cemetery services. Today, Carriage Services is a $400 million business. Its sales are up from $184.9 million in 2010 to $245.2 million today. That's a 33% increase.
- StoneMor Partners (NYSE: STON) runs 317 cemeteries and 105 funeral homes. The business spans across 28 states and Puerto Rico. StoneMor Partners is valued at $870 million. And revenue is up from $197.3 million in 2010 to $307.5 million today. That's a 56% increase. Analysts expect sales to grow 13% next year.
- Matthews International (Nasdaq: MATW) builds caskets and other funeral home products. Matthews International is a $1.9 billion business today. Its revenue is up from $821.8 million in 2010 to more than $1.4 billion today. A whopping 70% increase.
Funeral home business will continue to grow from here... and these companies should only shoot higher. It may seem like a morbid topic, but this is one unstoppable trend you don't want to overlook. Editor's Note: An alternate version of this piece - with helpful tips on lowering funeral costs - ran in our sister e-letter Wealthy Retirement. You can check that out here. | |
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