Going back to the time — over 50 years ago — when I was in junior high school (Middle School today) I had discusions with my father from time-to-time about what I would want to do with my life as I grew up.  When it came to following in his footsteps in the family funeral home I can remember him telling me, “It’s a noble profession and you will make a good living a nickel at a time”.

 

Those words have always stuck with me and when I saw last week’s 4th Quarter and 2025 Year End financial reports from Service Corporation (SCI) those words are what registered in my mind.  Here’s some highlights of that report, which you can access here, that SCI pointed out (emphasis by Funeral Director Daily):

 

• Revenue increased $19 million, or 2%, over the fourth quarter of 2024 with growth in both the funeral and cemetery segments, resulting in a full year revenue increase of $123 million, or 3%, over the prior year
• Gross profit increased $6 million, or 2%, over the fourth quarter of 2024, with full year gross profit increasing $49 million, or 5%, over the prior year
• Comparable preneed funeral sales production grew 11% over the fourth quarter of 2024
• Comparable total funeral sales average grew 3% over the fourth quarter of 2024
• Comparable preneed cemetery sales production grew 2% over the fourth quarter of 2024, with a full year increase of $48 million, or 4%, over the prior year

 

When you look at the emphasized “bolded percentages” none are stratospheric in nature and only the Preneed funeral sales production of 11% growth is something that is probably extraordinary.  They are not the percentage numbers that some are looking for from Nvidia or Palantir, or even Microsoft. . . . but in my book, they are good numbers for funeral service.

 

Then when you look at some of the numbers I have come up with for SCI for 2025 you truly see a company making great progress at a slow, orderly pace.  A little bit more than “a nickel at a time” but, true to my dad’s statement, providing a great living, or investment, over time.

 

Here’s what I found when I dug into some more of the 2025 results:

• Total Revenues for 2025:  Up 2.9%
• Operating Income for 2025:  Up 5.4%
• Earnings per Share for 2025:  Up 9.0%

 

Nickels turn into dimes and quarters and dollars —  Having a company that recorded earnings up 9.0% over the previous year should reward shareholders moving forward.  Again, going back to my dad’s statement, it’s the same for small family funeral homes as they build business, grow, and build brand value.  You earn that nickel at a time, but build company value every year into the future. . . . That’s exactly what Service Corporation International has done over time and 2025 is no exception.  Earnings moving up over time will build share price value as well.

 

To confirm that point one needs look no further than the history of SCI stock over the past decade.  Ten years ago, according to Seeking Alpha, SCI stock was valued at $23.05 per share.  Friday’s close, even after the drop last week, was at $79.66 per share.  Using that multiple, would make a $10,000 investment in SCI stock in 2016 worth $34,559 last Friday.  That’s a more than a triple multiple in value in only ten years.

 

That’s a very comparable number to the 10-year gain of Warren Buffet’s Berkshire Hathaway stock, seen by many as the #1 long-term reliable growth stock in America.  Again, according to Seeking Alpha, a $10,000 investment in Berkshire Hathaway in 2016 would have been worth $37,966 as of last Friday — a higher value, but similar to SCI’s value.

 

Or, here is another comparison.  Warren Buffet, founder and long-time Chairman of Berkshire Hathaway has often given the advice that if you only had enough money for one investment or if you didn’t want to study and diversify stocks, then you should invest in the index of the S&P 500 and just let the investment ride over time.  An investment of that type would be investing in the economy of America and its growing stocks.  One such investment that tracks the performance of the S&P 500 Index is the Vanguard 500 Index ETF Fund  (VOO).  $10,000 invested in that fund in 2016 would be worth $35,604 as of last Friday — again very similar to the SCI value for the same period.

 

So, I think my dad was right about funeral service and in this particular case Service Corporation International. . . .”It’s a noble profession and you will make a living (and investment gains) a nickel at a time”.  It’s interesting to me, that when compared to Berkshire Hathaway, the Vanguard 500 Index ETF Fund, and others that SCI, as an investment, flies so under the radar. . . . . Of course I’d be re-miss to mention, that past history is no guarantee  of future performance.

 

An interesting point about SCI’s Earnings Report last week, in a report of mostly good news, SCI did bring in over $1.11 billion in revenue in the 4th quarter which is an increase of 1.6% over the $1.093 billion the company brought in during the 4th Quarter of 2024.  However, SCI and analysts had anticipated that SCI would bring in $1.12 billion for the quarter — so they were $10 million, or 1 cent per share, short of that goal.

 

The company’s stock dropped 6.7% the next day and many speculate that that “miss” on revenue prediction is why.  However, I don’t think it is so easy to tell if that is the case or if there is more nuance to the drop in stock value. . . . Because, on that same day the market in general,  mostly on news of universal AI, political, and economic concerns, dropped precipitously with the Dow Jones index alone being off over 600 points.  That drop included a drop in almost 2/3 of the Dow Jones Index stocks.  SCI’s 6.7% daily drop in value may have simply been because the general market drop and the timing of the earnings report. . . .Time will tell if the stock rebounds or not.

 

There are some concerns:  Nothwithstanding the positive financial data points I’ve brought up in this article there are concerns that SCI needs to be looking at closely.  Here’s just a couple that I noticed with their “Comparable Funeral Results” which they define as funeral homes under their ownership at least one year (New acquisitions are not included):

• Comparable Funeral Services Performed for 4Q2025 as compared to 4Q2024:  Down 1.5%
• Comparable Funeral Gross Profit for 4Q2025 as compared to 4Q2024:  Down 2.8%

I think all traditional funeral homes have to watch that Gross Profit or “Margin” number because in a world of lower revenue per case coupled with inflationary higher costs of doing business that number could tumble in a hurry.  Funeral homes need to do what they can to maintain that “Margin” number.

 

Disclosure:  The author of this article for Funeral Director Daily is a shareholder of Service Corporation International, Berkshire Hathaway, and the Vanguard 500 Index ETF Fund.

 

More news from the world of Death Care:

• Transamerica expands policyholder support with Empathy’s estate planning tools.  Insurance Innovation Reporter
• Cemetery district ponders green burials.  All Point Bulletin (WA)
• Old Park Meadow in Dunmow runner-up for natural burial award.  Dunmow Broadcast (Great Britain)
• Pet cremation scandal could kprompt new PA law.  Patch

 

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