This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
Zacks Rank Education - Learn more about the Zacks Rank
Zacks Rank Home - All Zacks Rank resources in one place
Zacks Premium - The only way to get access to the Zacks Rank
Service Corporation International
by Todd BuntonJune 18, 2012 | Comments : 0 Recommended this article: (0)
This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
The company also recently announced a 20% increase in its quarterly dividend. It currently yields a solid 2.1%.
Nothing is Certain but Death and Taxes
Service Corporation International is the largest provider of deathcare products and services in North America. The company owned and operated 1,419 funeral homes and 373 cemeteries in 43 states, 8 Canadian provinces and the District of Columbia as of March 31, 2012.
It is headquartered in Houston, Texas and has a market cap of $2.5 billion.
First Quarter Results
Service Corporation reported better than expected first quarter results on April 25. Earnings per share came in at 20 cents, beating the Zacks Consensus Estimate by 2 cents. It was an 18% increase over the same quarter last year.
Revenues rose 4% to $602.5 million, slightly ahead of the consensus of $602.0 million. This was driven by a 7% increase in "preneed" funeral revenue as the average revenue per contract sold rose 3% to $5,565.
Meanwhile, operating income increased 4% year-over-year.
Following solid first quarter results, analysts revised their estimates higher for both 2012 and 2013, sending the stock to a Zacks #2 Rank (Buy).
The Zacks Consensus Estimate for 2012 is now $0.72, representing 11% growth over 2011 EPS. The 2013 consensus is now $0.78, corresponding with 8% EPS growth.
On May 9, Service Corporation announced a 20% increase in its regular quarterly dividend to 6 cents per share. It currently yields a solid 2.1%.
Valuation looks reasonable for Service Corporation with shares trading at 15.1x 12-month forward earnings, a discount to its 10-year median of 15.7x.
And its price to cash flow ratio of 7.4 is a discount to the industry median of 9.4.
The Bottom Line
With rising estimates, solid growth projections, a 2.1% yield and reasonable valuation, Service Corporation International offers investors a lot to like.
Please login to Zacks.com or register to post a comment.