Article on Seeking Alpha Expects StoneMor Dividend Cut

An article that appeared on Seeking Alpha on September 2, 2017, concludes that StoneMor Partners will be forced to either eliminate or greatly reduce their quarterly dividend soon.  StoneMor, a Master Limited Partnership built through funeral home and cemetery acquisitions has seen its stock plunge from about $26 per share in 2016 to a close of $6.59 per share last Friday.  The company owns 317 cemeteries and 105 funeral home properties.

The article lists four reasons why the author believes that StoneMor is edging toward a dividend cut.  They are:

  • The company can no longer depend on stock collateral and/or debt issuance to fund the dividend.
  • Language around delays in issuing the 2016 10-k has become increasingly uncertain and negative.
  • The CEO and CFO both resigned earlier this year.
  • The company faces two lawsuits calling the company a “financial shell game”

The article also contends that over the last three years StoneMor has actually had  -$16 million in free cash-flow. but paid out $422 million in “profit distributions” to shareholders.

Funeral Director Daily take:  At one time I was a stockholder of StoneMor.  I’ve always wondered how they have been able to pay out a fairly substantial dividend but, seemingly, never earned profits while I was a shareholder.  I’m guessing that over time the answer will come out, and it could well be that the dividend will be eliminated.[wpforms id=”436″ title=”true” description=”true”]


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