Death Care Index rises on the year. . .still trails general indexes

August 30, 2024/Finance/

Today marks the end of the financial markets for the first 2/3 of the calendar year 2024. We figured that would be a good time to look at how the financial markets have treated those stocks that still remain in the Funeral Director Daily Death Care Index (DCI).

We found that those four Death Care related companies still served in the public financial markets have risen an aggregate of 4.9% on the year to date. While that is a rise, it still trails the general market indexes of the Dow Jones Industrials, Nasdaq 100, and S&P 500 which have gained between 9.0% and 17.2% on the year — far outpacing the aggregate share price gain of the DCI.

Here is a small chart of the results as of the close of business on Wednesday, August 28.

Funeral Director Daily quick-thoughts on the DCI as of August 28:

The DCI membership of companies continues to shrink which shows the growing influence of private equity on the profession. When we started the DCI we had 8 companies involved in the public markets that had a large enough percentage of their business in Death Care to be included. Those companies were the four that are still in the DCI (Service Corporation International, Carriage Services, Matthews International, and Security National Financial Corporation) in addition to those four that have dropped out because of different ownership: Hillenbrand Industries (Batesville), Assurant (preneed insurance), StoneMor Partners, and Park Lawn Corporation. Of those companies, Assurant sold their preneed business to a private insurance company, Hillenbrand sold their Batesville division to a private equity firm, and StoneMor and Park Lawn Corporation were purchased in their entirety by private companies.

Park Lawn Corporation (PLC) exited the DCI with the finalization of the sale of their company in early August. PLC stock was priced at US$ 15.00 on January 1, 2024, and shareholders received US$ 19.23 per share at the time of the sale. That’s a 28.2% gain for those shareholders for the year.

If the PLC numbers were included in the August DCI totals, the net result for the DCI would have increased to a 7.17% increase year-to-date for the DCI.

Matthews International’s 30.7% drop in stock price since the beginning of the year, and to a lesser extent, Security National’s small gain somewhat skew the success of the 3 big funeral home and cemetery operating companies as a group in the DCI. If you included Park Lawn Corporation (using the sale price) with SCI and Carriage Services those three companies would have an aggregate gain of 20.3% — a gain higher than all three major indexes.

In my opinion, Matthews International and their dropping stock price is probably more indicative with issues in the company’s other divisions than in their Memorialization segment which includes Matthews Aurora Caskets and their well known Matthews cremation businesses.

Currently three of the DCI companies pay a regular quarterly dividend which totals an aggregate of $2.61 per share. With a current DCI aggregate value of $145.48 per share that works out to an annual dividend yield of 1.80%.

Enjoy the Labor Day weekend before we move into the Presidential election, the anticipation of lower interest rates coming our way, and, what may be a bumpy ride as the financial markets watch those issues.

Disclaimer — the author of this article for Funeral Director Daily holds stock positions in Service Corporation International, Carriage Services, and Security National Financial Corporation.

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