Seeking Alpha article looks at Carriage Services’ dividend paying ability as criteria

February 13, 2026/Finance/

I found an interesting but somewhat unusual opinion article from Seeking Alpha the other day that dealt with Death Care provider Carriage Services. The article is titled “Carriage: Dividend trends by the numbers” and can be accessed here.

While Funeral Director Daily generally does not give opinions on articles such as this I’m going to take one editorial license to comment on the premise of the article, not the conclusions. Over the years I’ve made statements concerning whether mature Death Care provider businesses, even those that are growing through acquisitions, should be valued more by their dividends, like mature utility companies, than by their revenue growth potential. That’s an argument that can be had depending on the dividend being paid out at the time.

However, at this time I see no let up by Carriage Services on their growth prospects and ambitions and no indication that they want to become something similar to a utility company, both in operations and in value. As I write this article on Wednesday, February 11, 2026, Carriage Services is currently at an inter-day price of $43.91 per share and pays a current dividend of 45 cents per share annually. At this point in time that would put their annual dividend yield at 1.02%.

I know of nobody looking to buy with dividends as a criteria that is looking for a 1.02% yield. In my opinion, people would be smarter to put the money into Certificates of Deposit at over 3.0% currently or into government bonds that would pay more than that 1.02%.

So, I will present this Seeking Alpha article and offer some of its quotes for readers, but I also think buying Carriage Services or Service Corporation International (current dividend yield at 1.63%), for that matter, as a dividend payer is highly unlikely among investors. Again, investors may very well want to buy these stocks but, in my opinion, it would be for reasons other than the current dividend amount.

It is also my opinion that the writer uses the dividend payout to point out, as one point of data criteria, his other opinions with the company.

Here are some quotes from the Seeking Alpha article:

” . . .upon examining Carriage’s most recent quarterly report, we observe that management anticipates continued momentum, driven by multiple acquisitions in the funeral home sector over the past few months. Preneed cemetery sales increased by over 20% in Q3, reaffirming full-year top-line guidance of approximately $415 million.”

“Although Carriage reports an annual average dividend growth rate of 5%+ over the past five years, growth has been nonexistent over the past three years, with the payout remaining at $0.45 per share. Growth is important in dividends because not only does it allow shareholders to participate in the company’s growing earnings, but it also fosters confidence regarding future earnings growth. Therefore, from an analyst’s perspective, we need to ascertain whether the company’s dividend growth policy is optional or whether it been forced upon the company in some way to free up capital in other areas.”

“Carriage’s dividend yield presently comes in at 1.05%, worked off a forward annual payout of $0.45 per share. The company’s 5-year average dividend yield comes in at 1.27%, which may suggest that the stock is slightly overvalued at present.”

“Carriage’s dividend payout ratio comes in at approximately 14.5% over a trailing 12-month basis. This is definitely a below-average number for a GAAP payout ratio and demonstrates the low earnings percentage that shareholders are currently earning. . . . Suffice it to say, with cash easily covering the payout, Carriage has no issues with affordability, all things remaining equal.”

“Carriage stock has rallied approximately 30% over the past five years, free cash flow has plummeted 43% in this period to presently come in at $2.53 per share. This trend, in one way, explains the very low payout ratios touched on earlier, in that cash has been hard to come by, all things remaining equal. Free cash flow is the most important metric in finance, bar none, as it demonstrates core operational health and the sheer capability that Carriage has in growing the company.”

“Therefore, to sum up, although Carriage has no issues with dividend affordability at this juncture, falling free cash flow, rising goodwill, and elevated debt bring risk to the company’s forward-looking growth curve, all things remaining equal. We rate Carriage a ‘Hold’ at this juncture. We look forward to continued coverage.”

Disclosure — The author of this article for Funeral Director Daily holds stock positions in Carriage Services and Service Corporation International.

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