Utah based Security National Financial Corporation issued their 2018 financial results earlier this month and you can see a statement from them here. The company announced a company wide increase in revenues of 1% to over $279 million. In addition, SNFC announced that their after-tax earnings from operations jumped over 53% from about $14 million in 2017 to $21.68 million in 2018.
SNFC operates in three segments: Life Insurance, Mortgages, and Cemeteries/Mortuaries. At Funeral Director Daily we are most concerned with how the Cemeteries/Mortuaries division operates and they do break out revenues and earnings for that group. For 2018, their Cemeteries/Mortuaries division revenue increased to $16.4 million from $13.3 million in 2017 and earnings before taxes increased to $3.9 million in 2018 from $1.67 million in 2017. President and CEO Scott Quist commented, “On the brighter side our life segment and Memorial segment revenues showed good revenue growth and excellent profitability growth.”
The $21.68 million after-tax profit is the best in the company’s 53 year history according to the article. CEO Quist mentioned in the earnings report that stockholders equity has grown on an average of 14.4% per year on a compound basis over the past 5 years.
Security National Financial Corporation owns funeral homes and cemeteries in Utah and California.
Funeral Director Daily take: Like many other public companies that operate in the death care space, I do own stock in this company. It is a small public company with a market valuation of less than $80 million. However, I have been very impressed with their operations.
For the past couple of years they have been voted “Best Funeral Homes” in Utah by consumers. It appears to me that the Memorial segment is somewhat slow and methodical in their business, but they did announce a couple of acquisitions earlier in 2019. It is hard not to be impressed by their revenue growth (in the Memorial segment) of 23% last year and their before-tax earnings growth of (in the Memorial segment) of 133%.
The company’s earnings per share of $1.25 on an approximate $5 stock price leads to a Price/Earnings ratio of about 4. . . somewhat unheard of in public companies.