When you follow the public companies in Death Care like I do it is unusual to find articles about them appearing very often.  But, last week two separate authors of Seeking Alpha gave opinions on Death Care public company Service Corporation International (SCI).

As is my custom with these types of articles I will quote some of the thoughts of these authors and provide links to the articles without giving my opinions on such.

The first article I found on SCI last week was titled “Service Corporation International:  The bull case remains intact” and can be found by clicking here.  It was authored by Blue Chip Portfolios for Seeking Alpha.

Here are some of the comments in that article:

 

• “Service Corporation International has delivered a 34% total return since December 2023, underperforming the S&P 500 but performing more in line with the equal-weight index.”

 

• “SCI’s performance has been driven by a combination of earnings growth and valuation multiple expansion.”

 

• “The fact that SCI has underperformed the broader market has been due largely to the fact that mega-cap tech stocks have fueled gains for the S&P 500. SCI’s performance has been more in line with the equal-weight S&P 500 index, which does not include as much exposure to mega-cap tech companies.”

 

• “The key driver of earnings and revenue growth during the quarter (3Q2025) was the company’s cemetery segment, which delivered gross profit growth of 12%.”

 

• “At the time of my previous piece (December 2023), SCI management had articulated a long-term annual EPS growth target of 8% – 12%. The company recently reiterated this long-term guidance. I view this guidance as achievable as key earnings growth drivers remain intact. The U.S. population continues to age, and a modest annual increase in deaths over time remains likely in my view. Moreover, the U.S. population has continued to increase, and ultimately a higher population in the U.S. increases SCI’s total demand for services in the long run.”

 

• “The risks related to AI disruption continue to spread to an ever-growing group of companies. . . . .I view SCI as being insulated from AI risks, as the deathcare business is unlikely to experience significant changes due to AI.”

 

• “Another risk that has weighed on a number of companies recently is Trump risk. President Trump has become increasingly focused on the affordability issue and has recently pushed to implement a 10% cap on credit card interest rates. Trump previously used the threat of tariffs to force drug companies to offer significantly lower prices in the U.S. Additionally, Trump has publicly called on defense companies to stop share repurchases. While it is unpredictable which companies Trump may target in the future, I view SCI as being fairly insulated from Trump-related risks, as the company operates in a relatively low-profile industry that does not generate much media attention.”

 

• “One risk that SCI investors should keep in mind is the increasing trend towards cremation”

 

 

A Second Article on SCI last week —  A 2nd article on SCI was found last week and authored by Value Sights for Seeking Alpha titled “Service Corporation International:  Visible Demand, Solid Pricing Power, and Moat“.  You can access the article by clicking here.

Here are some quotes from that article:

 

• “Demographic tailwinds support steady volume growth, high fixed costs (of the industry) create operating leverage, and the cemetery business provides a durable moat.”

 

• “The strongest growth driver for SCI is the demographics’ tailwind. . . . .This volume growth matters a lot over these coming few years because SCI is largely a fixed-cost business. The buildings, staff, and operations are largely the same regardless of volume. As a result, even a small increase in volume could drive a larger magnitude of margin expansion.”

 

• “We can get a sense of the demand runway by looking at SCI’s preneed backlog. SCI now has ~$16.8 billion of preneed contracts already sold. To be clear, this is revenue that has already been contracted and sales that have already been made (the cash is effectively secured, waiting to be recognized as revenue when the service is performed in the future).”

 

• “This is largely a simple business with almost certain demand, but SCI has a strong moat that makes it hard to displace, and that moat lies in its cemetery segment. In major cities like New York, Los Angeles, and Houston, building a new cemetery is extremely difficult due to land scarcity and strict zoning rules (besides, nobody wants a cemetery besides them). What this means is that SCI’s 499 existing cemeteries are in near-monopoly positions in their local markets.”

 

• “While I am positive of SCI’s pricing power, if it cannot raise prices across funeral and cemetery services as I expected, margins may not expand by as much. Higher interest rates could also pressure near-term returns, as the timing of death (revenue recognition) is not guaranteed. There is risk in acquisitions if SCI overpays or struggles to integrate new assets.”

 

 

Tom Anderson
Funeral Director Daily

Funeral Director Daily:  So there you have it.  Two authors offering a “bullish” opinion of Service Corporation International.  As I said before, in the Death Care world, it is very unique to find an article per month on the public companies of Death Care.  Interestingly enough, these articles were published on the same day!!!

Disclaimer — The author of the article for Funeral Director Daily is a shareholder of Service Corporation International.

More news from the world of Death Care:

• Rethinking Final Arrangements:  North Coast families explore new options.  The Times Standard (CA)
• How our bodies can foster new life after death.  Adirondack Almanack (NY)
• WebCE releases Michigan funeral continuing education catolog to meet new requirements.  24-7 Press Release
• Single mother with only weeks to live plans her own funeral, raises money for kids.  Video news story and print article.  WCSC -TV – Charleston (SC)

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