Today we introduce the Funeral Director Daily “Death Care Index” or DCI of the public equity markets. The DCI will consist of six publicly traded companies that deal in the funeral, cremation, cemetery, and pre-need industries and are publicly traded. The companies, which we will describe below, include Matthews International, Service Corporation International, Carriage Services, Hillenbrand Industries, Assurant, and Stonmor. As of the close of the markets on Friday, March 3, 2017, if you owned one share of each the value of your holdings would be $269.84 and the dividends received annually would be $5.66 for a yield of 2.09%. We will periodically update the index for you. Here is a brief description of the companies listed in order by annual sales:
Assurant — $7.5 billion in annual sales. Assurant provides risk management, mainly to consumers, and is segregated into three main categories — Global Housing, Global Lifestyle, and Global Pre-Need. they operate in North America, Latin America, Europe, and Asia.
Service Corporation International – $3.0 billion in annual sales. The granddaddy of funeral consolidation in the Americas. As of 12/31/16 SCI operated 1502 funeral homes and 470 cemeteries in 45 States, DC, Canada, and Puerto Rico. Their national branded funeral homes include National Cremation Society, Dignity Memorial, Advantage Funeral and Cremation, and Funeria del Angel.
Hillenbrand Industries – $1.58 billion in annual sales. Hillenbrand operates in two segments, the Processed Equipment Segment and Batesville. Batesville operates in North America in the death care industry mainly in burial caskets, cremation urns, and funeral service technology.
Matthews International – $1.5 billion in annual sales. Matthews is a conglomerate that operates in three segments, one of which is their Memorialization unit. The memorialization unit is further broken down into three operating segments – Matthews Aurora Funeral Solutions which is a manufacturer of caskets, the Cemetery Products Division which manufactures and markets products used in the cemetery and architectural industries, and the Environmental Solutions Division which is a world-wide leader in combustion systems including crematories.
Stonmor – $320 million in annual sales. Stonmor is a traditional consolidator that operates as a Master Limited Partnership (MLP). It is heavy on the cemetery side whereas it owns 310 cemeteries as compared to 100 funeral homes in 30 States and Puerto Rico.
Carriage Services – $248 million in annual revenue. A traditional consolidator that is heavy on the funeral home side where it owns 167 funeral homes as compared to 32 cemeteries in the United States. The company has traditionally operated in the suburban and rural markets.
Funeral Director Daily take: I’ve always kept a close watch on the public companies in the industry during my career. Many have come and gone — remember Loewen Group, Alderwoods, Equity Corporation International, and Stewart Enterprises? I have learned much from just reading their quarterly reports and getting another view of the industry. Over the course of time Funeral Director Daily will keep you updated on what is happening with these companies.