Part of what we try to do at Funeral Director Daily is to keep you updated on all things funeral service.  One of the ways we do that is by watching what is happening with the publicly held death care community stocks.  Here are the stocks that we check up on regularly and compute the Death Care Index or DCI by computing what would be the composite price of the group if you held one share of each.

Security National Financial Corporation – This financial services company based in Utah not only owns insurance and mortgage businesses, but it owns and operates a small group of funeral homes and cemeteries as well.

Service Corporation International – This company is the largest owner and operator of funeral homes and cemeteries in North America.  Their founder basically invented the funeral home “roll-up” acquisition strategy in the 1960s.  The company has never really wandered far from its funeral home/cemetery roots in growing the company.

Hillenbrand Industries – You will know this company from its base in the death care industry as the parent of Batesville Casket Company.  Over the years Hillenbrand has re-invented itself into a process equipment company while holding on to its casket division.  We’re told that in today’s Hillenbrand, Batesville accounts for only 30% of the revenues of the entire company.

Matthews– Matthews is a company with memorialization roots but is now a well rounded conglomerate that operates in the death care realm mainly in the cemetery and cremation business.  They do everything from make markers to build crematories.  Recently, they have been growing their memorialization segment through acquisitions.

Assurant-  Assurant is a world-wide financial services company with business in the property insurance business and the warranty business.  Their mark in the death care industry is their third leg of their corporate stool — that of pre-need funeral insurance.

StoneMor Partners – StoneMor Partners is a publicly traded limited partnership that owns and operates funeral homes and cemeteries.  Cash-flow issues over the last couple of years has caused StoneMor to suspend its dividend to shareholders.

Carriage Services — Another publicly traded company in the funeral home/ cemetery acquisition roll-up business.  Carriage seems to be very deliberate in their acquisitions, but do seem to grow little by little each year.

Park Lawn Corporation – Park Lawn grew from the cemetery business just going public in the last year.  In contrast to Carriage Services, they seem to be very aggressive in their acquisitions growing from about 40 properties to 140 properties just in the last eight months.

So, what has this group of stocks done since January 1, 2018, while the Dow Jones Industrial Average has risen just 2.44%?  The answer is that the Funeral Director Daily DCI Index is virtually unchanged.  In a U.S. dollar format (up until now we counted Park Lawn in Canadian dollars) the DCI sat at $291.53 on January 1.  Today, or actually June 11 when this article is written, the DCI is at $290.58 — that is actually slightly less than on January 1.  The DCI does, however, throw off a slight dividend of $5.16 which is computed at about 1.8% of the index value at this time.

There has been no real change in any of the eight stocks that comprise the DCI.  It appears, from our point of view, that the death care public companies and their investors are in a mode of “wait and see”.  We see investors standing on the sidelines wondering how the direct cremation growth will affect these companies.  The reality of the death care industry is that we have passed from a casketed case society to one of cremation, and increasingly direct cremation with no services.

I think investors are very cautious about the industry at this time just waiting to see if the big corporate companies can succeed in the cremation business with the profits that they did in the casketed services business.

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