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) Sees Growth in Cemetery Revenues
Read MoreHide Full Article
Service Corporation International (SCI - Free Report) has been experiencing growth in its Cemetery segment revenues. Dedication to strategic acquisitions and the establishment of new funeral homes for enhanced returns is contributing to the company’s growth story.
However, a slowdown in consumer discretionary spending attributed to inflation, is a concern. Looking ahead to 2023, the company anticipates a low-to-mid-single-digit reduction in funeral volumes due to the pandemic's pull-forward impact.
Factors Keeping SCI Well-Placed
Service Corporation 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 to the tune 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 company expects cemetery revenue growth in low-to-mid-single digits due to a normalized pre-pandemic growth trajectory.
The company maintains a steadfast commitment to its expansion efforts. 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 between $75 and $125 million.
Image Source: Zacks Investment Research
Present Concerns
Service Corporation continues to see moderation in consumer discretionary spending due to the impact of inflation. In the third quarter of 2023, 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. However, management anticipates a healthy low-to-mid-single-digit increase in the funeral average. Apart from this, a high interest rate environment remains a concern. Service Corporation expects 2023 adjusted earnings per share in the range of $3.40-$3.60 compared with $3.80 per share recorded in 2022.
Focus on expansion and fairly stable demand for the company’s services keep it well-placed for the long run. Shares of this Zacks Rank #3 (Hold) company have gained 7.5% in the past three months, outperforming the industry’s growth of 3.7%.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, Inc. (CELH - Free Report) , which develops, processes, markets, distributes and sells functional drinks and liquid supplements, holds a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Service Corporation (SCI) Sees Growth in Cemetery Revenues
Service Corporation International (SCI - Free Report) has been experiencing growth in its Cemetery segment revenues. Dedication to strategic acquisitions and the establishment of new funeral homes for enhanced returns is contributing to the company’s growth story.
However, a slowdown in consumer discretionary spending attributed to inflation, is a concern. Looking ahead to 2023, the company anticipates a low-to-mid-single-digit reduction in funeral volumes due to the pandemic's pull-forward impact.
Factors Keeping SCI Well-Placed
Service Corporation 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 to the tune 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 company expects cemetery revenue growth in low-to-mid-single digits due to a normalized pre-pandemic growth trajectory.
The company maintains a steadfast commitment to its expansion efforts. 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 between $75 and $125 million.
Image Source: Zacks Investment Research
Present Concerns
Service Corporation continues to see moderation in consumer discretionary spending due to the impact of inflation. In the third quarter of 2023, 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. However, management anticipates a healthy low-to-mid-single-digit increase in the funeral average. Apart from this, a high interest rate environment remains a concern. Service Corporation expects 2023 adjusted earnings per share in the range of $3.40-$3.60 compared with $3.80 per share recorded in 2022.
Focus on expansion and fairly stable demand for the company’s services keep it well-placed for the long run. Shares of this Zacks Rank #3 (Hold) company have gained 7.5% in the past three months, outperforming the industry’s growth of 3.7%.
3 Solid Staple Picks
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, Inc. (CELH - Free Report) , which develops, processes, markets, distributes and sells functional drinks and liquid supplements, holds a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.