If you had any money in the stock market during 2021 it would have been hard not to grow your investment cache.  During the 2021 calendar year the three indices most commonly referred to as a bellwether of the markets, the Dow Jones Industrial Average, the Nasdaq, and the S & P 500 were up 18.7%, 21.4%, and 26.9% respectively.

And, if you had watched the Funeral Director Daily Death Care Index (DCI) you would see that index, which holds seven death care company stocks, grew from a value of $182.68 on January 1, 2021, to $265.67 on December 31, 2021. . . .that’s an increase of 45.4% over the one year period.  The DCI consists of the following death care public companies – Hillenbrand Industries, StoneMor, Service Corporation International, Carriage Services, Security National Financial Corporation, Matthews International, and Park Lawn Corporation.  With the exception of StoneMor, all showed positive financial movement as to the price of their stock in calendar year 2021.

However, if you have watched the stock market over the first three weeks of 2022 you will agree that, at least for these three weeks, the market has a different feel to it.  As a matter of fact, those common indicators of the market — the Dow Jones, the Nasdaq, and the S & P 500 have all dropped in value for the year as of market close on Friday, January 21, 2022.  The Dow Jones has dropped 5.8%, the Nasdaq has dropped 12%, and the S & P 500 has dropped 7.8%.

The Death Care Index dropped to a value of $236.46 on Friday, January 21, 2022.  That is still quite a bit up over the last year and three weeks — still up almost 30% from January 1, 2021, but down 11% since the first of this year (1/1/2022).  Only StoneMor and Park Lawn Corporation have higher stock values than they did on the first of the year and StoneMor is up only 7 cents per share to $2.35 per share and Park Lawn Corporation is up 1.5% from $30.10 per share to $30.57 per share.

In contrast, the stocks of the other two funeral home/cemetery operating companies dropped 11% (Service Corporation International and dropped 19% (Carriage Services).  It’s also interesting to me that the drop in Carriage Services stock price dropped its Price to Earnings (PE) ratio to 33 – close to mirroring Park Lawn Corporation’s PE ratio of 36.  SCI’s PE ratio sits at 13.65.  From my point of view, that PE ratio difference indicates that investors seem to value Carriage Services and Park Lawn Corporation as more growth-oriented companies and Service Corporation International as a more stable operating company.

I think it is also fair to say when you look at those PE ratios that investors believe acquisitions can have greater effect on the growth of Carriage Services and Park Lawn Corporation than on SCI.  That makes sense, because an acquisition of the same size for those three companies brings more change to Carriage Services and Park Lawn Corporation simply because, at the time of the acquisition, the acquisition revenues and profits represent a larger percentage of those company’s revenues and profits than it would at SCI.

SCI’s December acquisition of Schoedinger Funeral and Cremation of Columbus, Ohio, shows that SCI is still in that game, however. . . . . Maybe just casting for bigger fish.

Going forward in 2022, the consensus seems to be that interest rate hikes will be instituted four to six times by the Federal Reserve Board and that inflation may moderate but steadily rise unless a balance of supply and demand returns to normal.   From my point of view, interest rate hikes, especially notes with variable rates, could have some effect on company performance as will the number of Covid deaths that may or may not be forthcoming.

One thing is for sure. . . there is always news and speculation that will continue to move markets one way or another.

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

More news from the world of Death Care:

• Only Jewish Cemetery in Gulf states gets new life as peace flourishes.  The Jerusalem Post (Israel)
• Police find decomposing remains at Johnstown funeral home.  The Times-Union (NY)

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