Service Corporation International (SCI - Snapshot Report), one of the largest deathcare providers, is expected to grow earnings by an average of 10% over the next 5 years.
SCI operates 1,412 funeral homes and 382 cemeteries in 44 states, 8 Canadian provinces, the District of Columbia and Puerto Rico.
It provides deathcare products and services including funeral services, cremation and the publishing biographies, images and memories of loved ones.
SCI Surprised on the Second Quarter By 15.4%
On July 28, SCI reported its second quarter results which surprised on the Zacks Consensus for the third time out of the last 4 quarters.
Earnings per share were 15 cents compared to the Zacks Consensus of 13 cents. The company made 12 cents in the year ago quarter.
Revenue was up 8% to $555.3 million from $513.9 million in the year ago quarter, boosted by acquisitions of Keystone and Palm Mortuaries.
SCI did not raise EPS guidance but it stated that it will likely report earnings in the middle to upper end of the prior earnings per share range of 48 to 56 cents.
The Zacks Consensus is a little more bullish than the company as 3 out of 5 estimates have moved higher in the last 30 days. The Zacks Consensus moved up 2 cents to 57 cents during that time, which is a cent higher than the company's current range.
SCI is a Zacks #2 Rank (buy) stock.
Growth & Income
For 2010, earnings are forecast to grow just 4.8% but analysts are optimistic about 2011, with projected earnings growth of 12%.
SCI also pays a dividend with a 2% yield, which is well above the industry average of 1.4%.
The stock has rebounded from the worst of the 2008 sell-off but has been trending sideways recently.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.