Finance

Death Care Index rises 14.7% year to date

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As we move into the seventh month of the calendar year, we felt that it was a good time for a check up on the Funeral Director Daily Death Care Index (DCI).  The DCI is a composite dollar amount of owning one share of stock in each of the seven public companies in the United States that have at least part of their business in the death care industry.

As we said in our last check in with the DCI, it appears that the index and the stocks that comprise it have been bouyed somewhat in reputation by how they handled, and their businesses performed, during the waves of death due to the Covid-19 pandemic throughout 2020.

A year ago at this time investors in the funeral, cremation, and memorialization space were concerned on how those companies, especially those companies in the retail death care business would fare considering the fact that social distancing measures were in effect that limited the amounts of services that could be provided to those families.

A year later now and we have seen how funeral homes all over the country stepped up to do what they could.  We also learned that cemetery property, and pre-need cemetery property, was  positively driven by the pandemic.  And, the sheer number of deaths, looking to be about a 15% increase nationwide, more than made up in revenue the revenue that was missed by limited services.  All of the funeral home/cemetery public companies seemed to follow that pattern.

Company quarterly financial reports for the April thru June 2021 period will be coming out in late July and early August and it will be interesting to see the numbers as to how they relate to death quantity numbers and revenue per service as we appear to be moving back to a period of normalcy in death care.  Some even believe that death care quantity numbers may drop somewhat in the next periods representing what some believe were “pull forward” deaths during the pandemic.

In any regard, investor sentiment for death care stocks continues to be high.  For the seven companies that now comprise the Death Care Index, we see a cumulative gain of 14.7% in value from January 1, 2021, to June 30, 2021.  That number is on par, and even a little better, that the Dow Jones, S & P, and Nasdaq indexes for the same period.  Year to date as of June 30, 2021, the Dow Jones was up 12.7%, the S&P was up 14.4%, and the Nasdaq was up 12.5%.

Here is how the individual stocks in the Funeral Director Daily DCI fared (stock price growth) for the first half of 2021:

  • Park Lawn Corporation (funeral homes/cemeteries)  –  + 23.3%
  • Matthews International (cremation equipment, merchandise, memorials)  –  + 22.3%
  • Carriage Services (funeral homes/cemeteries)  –  + 18.0%
  • Hillenbrand Industries (caskets)  –  +10.7%
  • Service Corporation International (funeral homes/cemeteries)  –  + 9.1%
  • Security National Financial Corporation (funeral homes/cemeteries, preneed, financial products)  –  + 9.0%
  • StoneMor LLC – (funeral homes/cemeteries)  –  Even

The seven companies have a cumulative stock price of $209.55 as of June 30 compared to a cumulative stock price of $182.68 on January 1, 2021.  Owning one share of each stock would pay a dividend of $3.32 for a yield of 1.58% as of June 30.

The DCI previous numbers have been recalculated to reflect the fact that Assurant is no longer part of the group as they are exiting the death care space with the sale of their preneed units.

Related — June 24 article from Zack’s.  Entitled “Favorable demand aids funeral service space:  4 stocks in focus.

Disclaimer — The author of this article holds stock positions in Park Lawn Corporation, Hillenbrand Industries, Service Corporation International, Security National Financial Corporation, and StoneMor LLC.

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