As reported last week on Funeral Director Daily, Carriage Services has hired William Goetz as its new Chief Operating Officer. Late last week we learned that Goetz has came out of the chute by showing confidence in the company the he will lead. It was reported in this article that on Wednesday, December 11, 2019, Goetz purchased 10,000 shares of Carriage Services common stock at an average share price of $27.48 leading to a total value investment of $274,800.
Funeral Director Daily take: It is a smart public relations move for an executive to show confidence in the company they are working at — spending their own money for stock in the company is one way to do that. It gives confidence to all who work at that place of business that the boss, with everything that he knows, is bullish on the company. It also gives the investment world confidence in such.
As of yesterday, Carriage Services stock closed at $27.72 per share so Mr. Goetz has a slight increase already. However, that price represents a multiple of 57 times the trailing 12-month earnings of $0.49 as reported by E-Trade.
Compare that with Service Corporation International which closed yesterday at $45.79 per share. That closing price is a more reasonable, in my opinion, multiple of 20 times SCI’s trailing 12 month earnings of $2.24 per share.
This is what makes the stock market so interesting. These two companies are in the same business and headquartered in the same city – Houston. Yet, the market values one company at 57 times earnings and another company at only 20 times earnings. Interesting.
I certainly don’t have this figured out. . . .time will tell us which value is correct.