Finance

Service Corporation gets some positive spin from Yahoo Finance

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Service Corporation International (SCI), the publicly traded acquirer and operator of funeral homes and cemeteries in North America is poised to report its 3Q 2019 results on October 30.  Prior to that happening, we noticed this short report in Yahoo Finance entitled, “Will Service Corporations’s strategies help maintain momentum?”.

The Yahoo Finance article concludes that SCI is “gaining from its endeavors and demographic trends”.  It mentions how the company is aimed at utilizing scale and efficiently deploying capital to move profitably into the future.

Specifically, the article makes these particular claims on why Service Corporation will keep their momentum.

  • SCI focuses on changing consumer needs and utilizing its robust scale to drive pre-need sales
  • SCI is better using technological advancements to better present its products
  • The company enjoys tailwinds via a favorable demographic landscape for its products
  • The company is well positioned to reap this favorable demographic trend and fuel its pre-need funeral and cemetery programs.

Apart from those favoring positions to acquire more market share, SCI is, according to Yahoo finance, committed to the pursuit of buyouts for all of its segments and also to build new funeral homes to generate greater returns.  The article points out that “buyouts are an integral part of the company’s capital investment ventures”. . . .again, according to the article SCI spent $14 million during its 2nd Quarter of 2019 on acquisitions and another $10 million on buildings and expansions.

Finally, the report concludes that interest expense is rising for SCI, however, the article concludes that the revenue growth efforts will offset any interest rate rate hurdle that SCI sees in the forseeable future.

According to E-Trade Financial, analysts expect SCI to post 2019 3Q revenue of about $790 million — that would be an increase of 1.4% over last years 3rd quarter revenue of $779 million.

In addition, E-Trade Financial analysts expect SCI to record a $0.38 per share 3Q earnings as compared to last year’s 3Q earnings of $0.35 per share earnings.

RelatedHere is a Funeral Director Daily article from last year’s SCI 3Q report on their proprietary pre-need system, Beacon.

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One Comment

  1. In my opinion, Waltrip/SCI should have been less greedy in the beginning, and strove to provide good service (not exemplary), therefore establishing itself as a good “go to” funeral service provider. In a sense, SCI could have become a standardized funeral service provider throughout the country. In some ways, the conglomerates have pressed the independents to be better at what they do. But SCI, at the same time, was being perceived as money-hungry, predatory. I may be wrong, but a different business model may have served SCI and families, better.

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