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Favorable Demand Aids Funeral Services Space: 4 Stocks in Focus
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While COVID-19 made things gloomy for players across several industries, there are spaces like funeral services that actually performed well amid the ongoing pandemic. Incidentally, companies offering deathcare products and services saw a rise in demand due to an increased mortality rate caused by the virus. In this regard, their revenues have been rising on higher funeral services performed and increased burials in cemeteries. Also, some companies experienced elevated demand for caskets, cremation equipment, cemetery memorial products and mausoleums.
Although companies are likely to witness some moderation in at-need revenues, thanks to mass inoculations and a decline in coronavirus cases, industry experts foresee a rise in pre-need revenues. Evidently, some companies projected a rise in pre-need revenues on their last earnings call. Also, with curbs on social gatherings being lifted, families are likely to get greater access to cemeteries, which in turn will increase the funeral size and thereby boost the revenues of players in the funeral services space.
Even, in general, the inevitability of death keeps demand for funeral products and services intact. Again, an aging baby boomer population bodes well for players in the industry. To squeeze more out of their operations, companies are focused on strengthening their base through expansion and acquisition of funeral homes as well as the development of cemetery property to generate higher revenues.
Such upsides, along with robust cost-containment initiatives, have been driving the performance of several participants in the Zacks Funeral Services industry, which is currently ranked #44 and placed among the top 17% of more than 250 industries. On that note, we have handpicked four stocks from this space.
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4 Stocks to Watch
Service Corporation International (SCI - Free Report) : The Zacks Rank #2 (Buy) stock has increased 7.7% in the past six months. The company has been benefiting from higher funeral services performed and increased burials in its cemeteries amid the pandemic-led higher mortality. Also, a robust cost structure has been aiding the company, which is one of North America’s leading providers of funeral and cemetery services. Apart from these, the company’s focus on making property developments is noteworthy. Markedly, the Zacks Consensus Estimate for current-quarter revenues suggests growth of 2.1% from the figure reported in the year-ago period. Apart from these, Service Corporation has a trailing four-quarter earnings surprise of 71.1%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carriage Services, Inc. (CSV - Free Report) : The Houston, Texas-based company appears well placed to benefit from its robust expense management and focus on solidifying the base, especially its cemetery portfolio. This provider of funeral and cemetery services and merchandise has been benefiting from increased revenues stemming from higher pandemic-related deaths. The consensus mark for current-quarter revenues indicates year-over-year growth of 4.9%. Shares of this Zacks Rank #3 (Hold) company have rallied 19% over the past six months. Carriage Services has a trailing four-quarter earnings surprise of 36.4%, on average.
Hillenbrand, Inc. (HI - Free Report) : This Zacks Rank #3 company’s shares have rallied 12% in the past six months. Hillenbrand’s Batesville segment is engaged in manufacturing and selling funeral services products, such as caskets, urns, containers, technology solutions for funeral homes and customers as well as other memorialization products. The segment has been benefiting from the company’s efforts to enhance customers’ experience, manufacturing excellence, product innovation and dependable delivery. Increased deaths from the COVID-19 pandemic have been lately driving revenues at this segment, thanks to elevated burial casket sales. For the current quarter, the Zacks Consensus Estimate for revenues indicates growth of 11.9% from the figure reported in the year-ago period. Hillenbrand has a trailing four-quarter earnings surprise of 39.5%, on average.
Matthews International Corporation (MATW - Free Report) : The company’s Memorialization segment is a provider of products like caskets, memorials and cremation equipment, mainly to cemetery and funeral home customers. The segment has been gaining from increased casket sales stemming from the pandemic. Also, higher sales of cremation equipment and cemetery memorial products have been aiding. This Zacks Rank #3 company’s solid funeral home products business bodes well. The consensus mark for current-quarter revenues indicates year-over-year growth of 6.5%. Markedly, the company has a trailing four-quarter earnings surprise of 32.2%, on average. Shares of this Pittsburgh, PA-based company have rallied 30.3% in the past six months.
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Favorable Demand Aids Funeral Services Space: 4 Stocks in Focus
While COVID-19 made things gloomy for players across several industries, there are spaces like funeral services that actually performed well amid the ongoing pandemic. Incidentally, companies offering deathcare products and services saw a rise in demand due to an increased mortality rate caused by the virus. In this regard, their revenues have been rising on higher funeral services performed and increased burials in cemeteries. Also, some companies experienced elevated demand for caskets, cremation equipment, cemetery memorial products and mausoleums.
Although companies are likely to witness some moderation in at-need revenues, thanks to mass inoculations and a decline in coronavirus cases, industry experts foresee a rise in pre-need revenues. Evidently, some companies projected a rise in pre-need revenues on their last earnings call. Also, with curbs on social gatherings being lifted, families are likely to get greater access to cemeteries, which in turn will increase the funeral size and thereby boost the revenues of players in the funeral services space.
Even, in general, the inevitability of death keeps demand for funeral products and services intact. Again, an aging baby boomer population bodes well for players in the industry. To squeeze more out of their operations, companies are focused on strengthening their base through expansion and acquisition of funeral homes as well as the development of cemetery property to generate higher revenues.
Such upsides, along with robust cost-containment initiatives, have been driving the performance of several participants in the Zacks Funeral Services industry, which is currently ranked #44 and placed among the top 17% of more than 250 industries. On that note, we have handpicked four stocks from this space.
4 Stocks to Watch
Service Corporation International (SCI - Free Report) : The Zacks Rank #2 (Buy) stock has increased 7.7% in the past six months. The company has been benefiting from higher funeral services performed and increased burials in its cemeteries amid the pandemic-led higher mortality. Also, a robust cost structure has been aiding the company, which is one of North America’s leading providers of funeral and cemetery services. Apart from these, the company’s focus on making property developments is noteworthy. Markedly, the Zacks Consensus Estimate for current-quarter revenues suggests growth of 2.1% from the figure reported in the year-ago period. Apart from these, Service Corporation has a trailing four-quarter earnings surprise of 71.1%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carriage Services, Inc. (CSV - Free Report) : The Houston, Texas-based company appears well placed to benefit from its robust expense management and focus on solidifying the base, especially its cemetery portfolio. This provider of funeral and cemetery services and merchandise has been benefiting from increased revenues stemming from higher pandemic-related deaths. The consensus mark for current-quarter revenues indicates year-over-year growth of 4.9%. Shares of this Zacks Rank #3 (Hold) company have rallied 19% over the past six months. Carriage Services has a trailing four-quarter earnings surprise of 36.4%, on average.
Hillenbrand, Inc. (HI - Free Report) : This Zacks Rank #3 company’s shares have rallied 12% in the past six months. Hillenbrand’s Batesville segment is engaged in manufacturing and selling funeral services products, such as caskets, urns, containers, technology solutions for funeral homes and customers as well as other memorialization products. The segment has been benefiting from the company’s efforts to enhance customers’ experience, manufacturing excellence, product innovation and dependable delivery. Increased deaths from the COVID-19 pandemic have been lately driving revenues at this segment, thanks to elevated burial casket sales. For the current quarter, the Zacks Consensus Estimate for revenues indicates growth of 11.9% from the figure reported in the year-ago period. Hillenbrand has a trailing four-quarter earnings surprise of 39.5%, on average.
Matthews International Corporation (MATW - Free Report) : The company’s Memorialization segment is a provider of products like caskets, memorials and cremation equipment, mainly to cemetery and funeral home customers. The segment has been gaining from increased casket sales stemming from the pandemic. Also, higher sales of cremation equipment and cemetery memorial products have been aiding. This Zacks Rank #3 company’s solid funeral home products business bodes well. The consensus mark for current-quarter revenues indicates year-over-year growth of 6.5%. Markedly, the company has a trailing four-quarter earnings surprise of 32.2%, on average. Shares of this Pittsburgh, PA-based company have rallied 30.3% in the past six months.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>