We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Service Corporation (SCI) Rallies More Than 20% in 3 Months
Read MoreHide Full Article
Service Corporation International (SCI - Free Report) appears well positioned on the back of its expansion initiatives. Relatively stable demand for deathcare products and services has been contributing to the company’s revenue growth. The company’s shares have rallied 22.7% in the past three months compared with the industry’s rise of 17.4%.
Strong Cemetery Segment
The company has been seeing a rise in Cemetery segment revenues for a while now. In the third quarter of 2023, consolidated Cemetery revenues came in at $447.1 million, up from $423.8 million reported in the year-ago quarter. Comparable cemetery revenues increased 5.2%. The upside was mainly caused by increased core revenues of $21.4 million.
The main reason for this expansion can be attributed to the conclusion of construction projects in the third quarter. Furthermore, an uptick in income from merchandise and service trust funds contributed to growth. Management expects preneed cemetery sales production growth in the range of flat to an increase at a low-single-digit rate in the fourth quarter. In 2024, the Zacks Rank #3 (Hold) company expects cemetery revenue growth in the low-to-mid-single digits due to a normalized pre-pandemic growth trajectory.
Image Source: Zacks Investment Research
Expansion Initiatives
Service Corporation has been committed to expansion. During the first nine months of 2023, the company incurred capital expenditures of $267.8 million, which included increased cemetery development expenditures and digital investments, among others. The company invested $148 million in its current businesses, new growth opportunities and lucrative acquisitions in the third quarter of 2023. Management expects total maintenance, cemetery development and other capital expenditures in the band of $290-$310 million in 2023. Its acquisition investment goal for the year remains at $75-$125 million.
Funeral Segment Concerns
In the third quarter of 2023, consolidated Funeral revenues came in at $554.8 million compared with $554 million reported in the year-ago quarter. Total comparable funeral revenues fell 1.3%, mainly due to a fall in core funeral revenues. Core funeral revenues fell 2.2% due to a decline in core funeral services performed to the tune of 6.2%. This was somewhat countered by growth in the core average revenue per service of 4.3%.
For 2023, the company expects a low-to-mid-single-digit decline in funeral volumes due to the pandemic’s pull-forward impact. Apart from this, Service Corporation continues to see moderation in consumer discretionary spending due to the impact of inflation.
The Zacks Consensus Estimate for Sysco’s current fiscal-year sales and earnings suggests growth of 4.1% and nearly 8%, respectively, from the year-ago reported numbers.
Ingredion Incorporated (INGR - Free Report) , which produces and sells sweeteners, starches, nutrition ingredients and biomaterial solutions, holds a Zacks Rank #2. INGR delivered a positive earnings surprise of 23.9% in the last reported quarter.
The Zacks Consensus Estimate for Ingredion Incorporated’s current financial-year sales and earnings suggests growth of around 5% and 24.7%, respectively, from the year-ago reported numbers.
Nomad Foods (NOMD - Free Report) manufactures, markets, and distributes a range of frozen food products. It currently has a Zacks Rank #2. NOMD has a trailing four-quarter earnings surprise of 7.7%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales suggests growth of 6.6% from the year-ago reported figure.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Service Corporation (SCI) Rallies More Than 20% in 3 Months
Service Corporation International (SCI - Free Report) appears well positioned on the back of its expansion initiatives. Relatively stable demand for deathcare products and services has been contributing to the company’s revenue growth. The company’s shares have rallied 22.7% in the past three months compared with the industry’s rise of 17.4%.
Strong Cemetery Segment
The company has been seeing a rise in Cemetery segment revenues for a while now. In the third quarter of 2023, consolidated Cemetery revenues came in at $447.1 million, up from $423.8 million reported in the year-ago quarter. Comparable cemetery revenues increased 5.2%. The upside was mainly caused by increased core revenues of $21.4 million.
The main reason for this expansion can be attributed to the conclusion of construction projects in the third quarter. Furthermore, an uptick in income from merchandise and service trust funds contributed to growth. Management expects preneed cemetery sales production growth in the range of flat to an increase at a low-single-digit rate in the fourth quarter. In 2024, the Zacks Rank #3 (Hold) company expects cemetery revenue growth in the low-to-mid-single digits due to a normalized pre-pandemic growth trajectory.
Image Source: Zacks Investment Research
Expansion Initiatives
Service Corporation has been committed to expansion. During the first nine months of 2023, the company incurred capital expenditures of $267.8 million, which included increased cemetery development expenditures and digital investments, among others. The company invested $148 million in its current businesses, new growth opportunities and lucrative acquisitions in the third quarter of 2023. Management expects total maintenance, cemetery development and other capital expenditures in the band of $290-$310 million in 2023. Its acquisition investment goal for the year remains at $75-$125 million.
Funeral Segment Concerns
In the third quarter of 2023, consolidated Funeral revenues came in at $554.8 million compared with $554 million reported in the year-ago quarter. Total comparable funeral revenues fell 1.3%, mainly due to a fall in core funeral revenues. Core funeral revenues fell 2.2% due to a decline in core funeral services performed to the tune of 6.2%. This was somewhat countered by growth in the core average revenue per service of 4.3%.
For 2023, the company expects a low-to-mid-single-digit decline in funeral volumes due to the pandemic’s pull-forward impact. Apart from this, Service Corporation continues to see moderation in consumer discretionary spending due to the impact of inflation.
3 Promising Consumer Staple Bets
Sysco Corporation (SYY - Free Report) , a food and related product company, currently carries a Zacks Rank #2 (Buy). SYY delivered a back-to-back positive earnings surprise in the past two quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Sysco’s current fiscal-year sales and earnings suggests growth of 4.1% and nearly 8%, respectively, from the year-ago reported numbers.
Ingredion Incorporated (INGR - Free Report) , which produces and sells sweeteners, starches, nutrition ingredients and biomaterial solutions, holds a Zacks Rank #2. INGR delivered a positive earnings surprise of 23.9% in the last reported quarter.
The Zacks Consensus Estimate for Ingredion Incorporated’s current financial-year sales and earnings suggests growth of around 5% and 24.7%, respectively, from the year-ago reported numbers.
Nomad Foods (NOMD - Free Report) manufactures, markets, and distributes a range of frozen food products. It currently has a Zacks Rank #2. NOMD has a trailing four-quarter earnings surprise of 7.7%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales suggests growth of 6.6% from the year-ago reported figure.