StoneMor bucks the system

Foundation Partners why I partnered

Those of us who have watched the markets over the last few weeks have seen a deterioration in the value of our private investment portfolios.  What has happened in the broader market is also indicative of what has happened in the death care industry with the exception of StoneMor, Inc. and its stock and valuation.

StoneMor, based out of Trevose, Pennsylvania, operates approximately 320 cemeteries and 88 funeral homes in 27 states and Puerto Rico.  It is no secret that they have had a tough time in business the last few years and have announced a turnaround plan which included a selected property divestiture plan in addition to their continuing operations plan.

During this quarter they have completely divested their California portfolio of assets which we will comment on later in this blog.  Doing so has allowed the company (at least temporarily – this is being written with March 20 stock prices) to raise their stock price in 2020 from a low of $0.90 to a closing price of $1.20 on Friday.  That has raised their valuation (outstanding stock x stock price) to $51.2 million from a 2020 low of $38.3 million ( a 33% increase) and, to our knowledge, be the only public operation death care company to do so in 2020.

Just for a comparison, here is what we have found for the other public death care companies that are involved in the business of funeral homes and/or cemeteries realm of the profession that we are aware are listed on public United States exchanges.

Service Corporation International (SCI) — The stock price has dropped from a 2020 high of $52.89 on March 4 to a close on Friday, March 20 of $35.94.  That represents a 32% decline in value and a market value drop of the company from $9.6 billion to $6.49 billion.

Carriage Services — Carriage Services recently bought one of the StoneMor California properties, Oakmont Memorial Park & Mortuary, for approximately $33 million.  Carriage Services stock has dropped from a high of $25.90 per share on January 17, 2020, to $15.34 per share last Friday.  That is a drop of about 41% and puts the market value of the company at $275 million as compared to $465 million on January 17.

Park Lawn Corporation — Park Lawn Corporation stock closed at $21.92 per share on Friday which is down from a high of $23.85 per share on January 9, 2020.  That is a drop of only 8% and lowers the market capitalization of the company from $689 million to $633 million.

Security National Financial Corporation (SNFC) – This Utah based company that is in the financial end of the funeral industry as well as operating funeral homes and cemeteries closed at a stock price of $4.36/ share on Friday.  Their high for 2020 was on January 9 with a closing price of $6.42.    That represents a drop of about 33% and a market capitalization today of $70.2 million as compared to their high market capitalization for the year on January 9 of $103.3 million.

At Funeral Director Daily we recognize that these are unprecedented times that will not last forever.  We give you this stock market news not as a pro or con as to what will happen or has happened, only as a reference of where we are at at a point in time.  As a matter of fact, we believe those in the funeral/cremation/cemetery businesses are some of the longest term players in the business world.  Conservative business practices have historically shown that companies in this industry will increase market value over time.  As a matter of fact, even with the uncertainty in the market today, different brokerages are listing SCI, Carriage Services, and Park Lawn Corporation as potential stocks to buy for the long-term.

RelatedStoneMor, Inc. announces sale of all California assets.  You can read the press release here.  This was announced on Friday and here is a quote from StoneMor CEO Joe Redling, “Coupled with the sale of Oakmont in January, these two agreements represent a complete exit from the state of California for StoneMor, which was a key component of our previously announced divestiture strategy. . . . Additionally, with the exit of California, we have started the process of optimizing our footprint.”

From the Editor:  With today’s blog we are going to start a new feature on Funeral Director Daily.  For a couple of years now we have taken one death care related article in the news and written or commented on that article.  We do hear that some people do like our writing style and commentary, but we are also aware that readers may just want to read what is going on in the profession without the commentary.  We will continue the one article commentary, but also provide links to other items of interest in the death care space.  Here is our group for today:

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