Pension funds and endowments have the responsibility of shepherding for safety, growth, and income their assets into a multitude of investments.  I’ve learned that most of those types of investors invest in bonds and private debt for income and stocks for short-term growth.  Some will invest up to 5% of the assets into new ventures hoping to make a better than average return on those funds while realizing that there is risk involved also.

But I’ve also learned that pension funds and endowments invest a very large percentage of their assets into what I would call “slow-growth” infrastructure that is not real liquid.  Much of this type of investment is in commercial real estate, agricultural land, cell phone towers, storage facilities, and energy production infrastructure.

While stocks and bonds of funeral service companies have been bought and sold as investments for pension and endowment funds, I’m not sure if any pension fund or endowment fund has invested in what one might call “an infrastructure investment” in Death Care.  If so, I’m trying to think of what that infrastructure would have been  — maybe a cemetery?

I think that is what makes the recent acquisition by British pension fund manager Railpin of Horizon Ceremonies Limited unusual and an interesting play on the long-term cremation and ceremony outlook.  According to this article, Railpin recently purchased Horizon, which is described as a United Kingdom-based operator and developer of crematoria from private equity company Maven Capital Partners.

Horizon operates three crematoria in Great Britain with what is described as “a strong pipeline of greenfield development sites in underserved areas across the UK, aligning with its mission to improve the experience and accessibility of cremation services nationwide”.

According to the linked article, “The business operates a B2B model, providing cremation services to funeral directors and direct cremation specialists, ensuring flexibility and choice for communities during the most sensitive times.” 

The United Kingdom historical cremation model —  What is different with cremation in the United Kingdom as compared to the United States is that crematories have traditionally been owned and operated by municipalities and not funeral directors in the UK.  Consumers would arrange their loved one’s funeral through the funeral director but then go to the municipal crematory for a service and cremation.

In essence, the crematories are owned and operated by the municipality and consumers are charged for the crematory services by funeral directors much like “cash advances” are charged for items in the United States.

Railpin is counting on the ability to build new crematoriums through private enterprise to compete with many of the aging cremation infrastructure of municipalities.   They are also counting on the increased use of Direct Cremation to build the numbers of cremation higher and higher.

Here’s what Tim Grimstone, Investment Manager at Railpin said about the Horizon investment:

“Our investment in Horizon is directly aligned with Railpen’s purpose of securing the future for our members by delivering strong, diversified investment returns while having a positive impact on the communities in which we invest. The UK is facing a clear demographic need for new, high-quality crematoria, and Horizon’s award-winning track record and commitment to sensitive, well-designed facilities positions them to meet that demand. By backing Horizon’s growth, we are investing in critical social infrastructure that will provide sustainable income streams to support our members’ pensions.” 

Related — For an idea of a British Crematorium here is a 1-minute video tour of Pure Cremation’s original facility

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I find this development extremely interesting to our profession.  To me, I see a private company investing in “Death Care” to build-out and take-over municipal infrastructure in Great Britain.  Quite frankly, it looks like a long-term goal of Horizon, under Railpin’s ownership, is to move ceremony and cremations in Great Britain from a municipal facility to a facility that is owned by private concerns.

And, I would also add that in most instances a private company will be able to operate a more efficient and consumer friendly business than a municipality can. If they succeed in replacing municipal crematories, Horizon will bring great value to this infrastructure and Railpin pensioners.

Quite frankly, it is very much like Pure Cremation did when building their own crematory and ceremony facility to serve the London area. . . .and, if selling for $400 million dollars 10 years later is considered successful, then Pure Cremation was very successful.

What about this happening in the United States:  The crematory system is fundamentally different in the United States than it is in Great Britain which would make this type of investment questionable in the U.S.  The U.S. already has independently owned business crematories so there is no municipality crematories to replace and operate in a more efficient manner.

However, what I think is interesting is thinking about “Death Care” not in an operational business vernacular but in an “infrastructure” vernacular.  We will always have deaths and we will always need infrastructure to care for deaths.

Thinking of parts of the business as “infrastructure” rather than “business operations” may allow much more well-heeled financing into the Death Care business.  For instance, would a real estate investment trust consider building the infrastructure out for a group of “Celebration Centers” across a region or the country to be managed by an operating company?  The “Celebration Centers” could be chosen by families for celebrations, services, lunches, visitations, and the like.

Or, would that same type of real estate investment trust be interested in building out new and modern facilities for an existing funeral home operator on a lease-back type of arrangement?  I think that is possible too.

Pension funds and endowment funds would not be so focused on the annual return as they would the long-term real estate appreciation in value over time.  And, in my book, that brings a lot more potential investors to the plate in Death Care who would look for their returns in a patient fashion.

Learning about Pensions and Endowments:  When I served on the University of Minnesota Board I learned much about pension and endowment investing.  Most people don’t even realize it, but at the U of M and many other colleges, we had an Office of Investment and Banking  (OIB) — you can get a description of the U of Minnesota’s office here. 

The OIB was tasked with operating everything from our own insurance company to the endowment fund to retirement plans.  I chaired the Debt Management portion for four years and learned much about the world of big finance.  One of the things I loved to do in that position was talk, in general terms, of the investment world with our Chief Investment Officer.  Sometimes it was just fascinating to see where our money was invested. . . . . Oh, and it was public money so from time to time we had to have the discussions about fossil fuels and ESG investing (Environmental, Social, and Governmental) options.. . . .All in all, it was a great learning experience for this small-town funeral home operator.

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Enlightening and Honest NYT Article About Deathcare Draws Interesting Responses

These days, anytime a deathcare professional hears that the funeral service is the subject of a big news story, cringing with dread is usually the natural reaction. The profession’s (very) few bad actors seem to gather 99% of the spotlight. On May 15, though, The New York Times featured an article that shed an empathetic and fair light on the industry’s economic challenges, highlighting positive innovations and featuring some of deathcare’s brightest stars.

The NYT headline, “Profits Are Stagnant. But the Funeral Industry Is Not Dead Yet,” was followed by the subtitle, “As cremation rates rise and consumer preferences shift, funeral homes are innovating in surprisingly unconventional ways so they don’t die out.” The story, authored by Susan Shain, was an installment in the outlet’s Making It Work series about “small-business owners striving to endure hard times.”

Similar sentiments 

For the article, which requires a subscription for full access, Shain interviewed four funeral professionals, each of whom addressed deathcare’s current concerns (overwhelmingly, rising cremation rates and staffing shortages) and how they’re overcoming them. Lanae Strovers, funeral director at Hamilton’s Funeral Home in Des Moines, Iowa, shared examples of highly-customized services she’s created for families, citing the similarities to planning parties. 

“[..T]hose two lines are crossing over and we just need to open up our thought process and be there to help the families,” Strovers said. 

Walker Posey of Funeral Directors in North Augusta, South Carolina seconded Strovers, describing some of the highly personalized services he has conducted. Posey said that educating families that services like these aren’t just limited to traditional burials, but can accompany cremation as well. 

Sarah Smith, a funeral director at Einan’s at Sunset Funeral Home in Richland, Washington, and Faith Haug, chair of the mortuary science department at Arapahoe Community College in Littleton, Colorado, offered similar responses. Both advocated for evolving business models and complementary offerings, such as bright, all-purpose event spaces, low-cost cremations, and more eco-friendly options like green burial and natural organic reduction. 

And now … the comments

Unlike subscribers to some platforms, the majority of the NYT readers who commented on Shain’s article offered some profound responses and only a couple of truly derogatory replies. 

Many recommended preplanning and notifying family members of those plans, while others recommended body donation for medical study. Some expressed their personal plans or preferences and discussed specifics like the validity of headstones, whether or not public viewings should continue and how funeral home paperwork could be cut down. And of course, there were the obligatory few bemoaning “Big Death” and high carbon footprint disposition methods.

Overall optimism

In light of many recent deathcare-related headlines, this piece is refreshingly optimistic and honest. End-of-life preferences may be changing, but the profession remains ready to serve, whether that means hosting a cocktail hour and setting up a runway and mannequins for a service for a model and fashion designer (as Strovers has done) or hiring people wearing superhero costumes to greet visitors at the memorial for a child (thanks to Posey).

Haug closes out the piece on a hopeful note, predicting that even if some operations are forced to close their doors or sell to large corporations the deathcare profession will live on.

“Funeral service will exist until there are no people,” Ms. Haug said. “I mean, animals care for their dead — the profession is not going away. But it does look different than it used to, and it is going to continue to evolve.”

Funeral Director Daily presents you the final report of our hat trick of financial reports this week.  Today we bring you the results of Matthews International’s operations for the period of January thru March 2025 which is the company’s 2nd fiscal quarter of the year.  Earlier this week we reported on the same period of time for Service Corporation International and Carriage Services. . . . It is the first time in my writing of Funeral Director Daily that I can remember having three quarterly reports coming out in the same week. . .

In any regards, there is a lot to digest in the Matthews International report.  As we always point out, Matthews is a diversified company with one of their three segments involved in Death Care.  That segment includes a cremation business that builds crematories, a wholesale casket business known as Matthews Aurora, and a segment dedicated to cemetery memorials and markers, as well as a complete line of cremation products.

For the 2nd Quarter of 2025 Matthews reported that their Memorialization Segment had revenues of $205.6 million which is down about 7.5% from the same period in 2024.  Furthermore, the company states that the Memorialization Segment has 6-month sales revenue of $396.1 million as compared to sales of $430.2 million for the first six months of fiscal 2024 — that is a drop of about 8.0%.

Here’s how Matthews International explained that sales slide in prepared remarks in a press release, that you can access here, on the company’s 2nd Quarter, “The Memorialization segment decline primarily resulted from lower unit volumes of caskets, cemetery memorials, and cremation equipment, partially offset by improved price realization. Lower casketed deaths resulting from the continued normalization of death rates post-pandemic impacted the segment’s sales compared to a year ago.”

In essence, it seems to me that, first of all, there were less casketed deaths in the quarter, but it also seems to say, “We raised prices and then sold less”.  In my opinion, that is probably a strategy that will not play well in today’s market.

The Matthews Dilemma:  In the press release about the 2nd Quarter 2025 results Matthews CEO Joseph Bartolacci also makes this comment, “The Company’s comprehensive evaluation of strategic alternatives for our entire portfolio remains ongoing. The Board and I firmly believe the inherent value of the Company is well above current trading levels and, over the next several months, we intend to identify the appropriate path to unlock this shareholder value. . ”

Matthews International, in the latest report, state a 6-month Net Loss before Income Taxes of over $17 million as compared to the same period of 2024 when they reported a $4.8 million positive income in the same category.

In getting to that equation, not only has the Memorialization Segment seen reduced year-over-year sales in 2Q25 but so has the Industrial Technologies Segment of the business — which had a sales decrease of 30.4%.  The only segment that had an increase was the SGK Brand Solutions Segment, which increased sales by about 6.2% year over year.

However, as this recent press release indicates, Matthews International has recently sold what appears to be about a 60% equity interest in the SGK Brand Solutions Segment of the company.

Related Article —  “Matthews International sells SGK Brand Solutions”.  Pennsylvania Business Report (PA)

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  As a Death Care publication I look at the business situation at Matthews International with a wonder of how will it all turn out.  The SGK Brand Solutions Segment sale should bring in some much needed capital which one would expect would be used to turn around the revenue declines at the Memorialization and Industrial Technologies segments.

It should also be noted that CEO Bartolacci made this comment about the sales in the Industrial Technologies Segment, “. . .demand and interest in our energy storage solutions are regaining strength as customer quotes since early February 2025 have exceeded $100 million.”   That fact would also be a positive development in getting the company back on track.

With total company sales down about 10% for the first six months of Fiscal Year 2025 ($829.4 million as compared to $921.2 million for the first six month os FY2024) I would expect that there is some pressure from stockholders to turn things around.

In my opinion there is a hope that the energy storage solutions that Matthews has invested in turns out to be a viable winning product and I would also expect some type of move to regain positive momentum in the Death Care/Memorialization segment as well.

I expect the 2nd half of Matthews International’s 2025 fiscal year, and the decisions made in that time period, to quite  possibly be the most significant and decisive six months in charting the future plans and strategies for the company’s next decade.

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Where will future revenue growth for the funeral industry come from?  That’s a thought that I have after I did a small study or exercise on growth revenues for certain industries.  While my study is not scientific I looked at selected companies to gain an idea of how well the respective industries are gaining revenue in the past six years — since a pre-pandemic time.

I used three public companies in each industry that I checked on — Death Care, Technology, Grocery, Retail, and Quick Service Restaurants (QSR).  I wanted to find out how “Top-Line” revenue in each industry had grown during that time.  The “Revenue” of three companies in each category were totaled to give a number that was then compared to the prior year number of each.

The companies that were used for the Death Care or Funeral Industry comparison were Service Corporation International (SCI), Carriage Services, and the Memorialization Segment of Matthews International.

I used the same type of thought process for the other four industries — one large leader (like SCI) and two smaller companies.  My results were interesting and because the revenue numbers between the categories varied greaty — such as a total of $5.4 billion in revenue for the three companies involved in Funeral Industry compared to $826 billion for the three companies in the Technology sector —  I suggest that you look at the graph line shifts from year-to-year rather than the segment revenue dollar amounts.

In my opinion, looking at the year-to-year revenue change gives some type of indication of how much revenue is flowing into each sector.

In my opinion, the results I found were very interesting. . . in some cases, in a comparative mode, positive for the Funeral Industry.  However, after you see the charts below I will tell you why I think there is some reason for concern in the Death Care profession.

First of all, some good news for funeral service.  If you simply look at the revenue growth from 2019 through 2024, you will find that the growth of revenue, on a comparative basis has grown more for the Funeral Industry than for either the “Grocery”  and “Retail” categories.  Here is the percentage revenue growth for the five categories from 2019 through 2024:

• Technology – 78.0%
• Quick Service Food – 37.6%
• Funeral Industry – 30.00%
• Grocery Industry – 26.0%
• Retail Industry – 25.3%

Funeral Service Industry Revenues

Companies Used — SCI, Carriage Services, Matthews International Memorial Segment

Quick Reaction:  Revenue increased 27.5% from 2019 to 2021 (Pandemic Years) but has increased a total of only 3.2% since.  In my opinion, Death Industry revenue seems to be “flatlining”. . . .Not a good sign.

Grocery Revenues

Companies Used — Kroger, Sprouts, Albertsons

Quick Reaction:  Solid, annual growth.  Slowed to 1.8% in 2024 possibly because of inflation and customers looking to lower-cost alternatives.

Technology Revenue

Companies Used — Amazon, Verizon, Cisco.  (Stayed away from the high-flying chip business)

Quick Reaction:  Over 20% growth through 2020 (pandemic related).  Continual high growth although Verizon is flat as cell-phone technology is waning compared to other technologies.  Amazon grew a whopping 67.7% during the pandemic years (2019 thru 2021) more than likely stimulating growth in “online purchasing” in general. . . . In my opinion, this “online purchasing choice” will eventually affect traditional Death Care in some capactity.

Quick Service Restaurant (QSR) Revenue

Companies Used — McDonalds, Chipotle Mexican Grill, Yum Brands

Quick Reaction:  A pandemic related drop in revenues in 2020.  Growth is starting to grow.  It has possibly been restrained by staffing shortages and inflation.

Retail Revenue

Companies Used:  Wal-Mart, Kohls, Caseys Gas Stations

Quick Reaction:  Winners and Losers.  Department stores such as Kohl’s have actually lost top-line revenue.  Casey’s seems to shift depending on the price of gasoline.  Wal-Mart grew only 8.6% during the pandemic years, slowing their growth.  Considering the growth of Amazon, one might believe that universal “online shopping” is actually cutting into Wal-Mart’s growth.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  This exercise was simply a non-scientific comparison of what in my mind was somewhat “comparable” companies in differing industries.  While I’ve given you a “Quick Reaction” of mine of each segment, your extrapolation of the data I have presented may be very different than mine and that is understandable.  Nobody’s perceptions and opinions are right or wrong. . .and are just that — perceptions and opinions and not fact.

“Where will future funeral industry revenues come from???” —  This question is probably the most concerning question to me after looking at the revenues of SCI, Carriage Services, and Matthews International Memorialization Segment.  In the business year of 2022 those three units had reported cumulative total top-line reported revenue of $5.31 billion.  Two years later the comparative number was $5.4 billion  —  in round numbers about $100 million more which is only about a 1.7% increase over two years. . . . . And in those same years you would guess that their inflation related costs were up by much more.

As Baby Boomers lose their lives it is expected that the number of deaths in the United States will rise  — funeral practitioners have been told that for years.  However, it appears to me that we are also reaching a point where American consumers are, on average, selecting services that bring in less revenue per case to funeral homes.

Death Care is somewhat unique as a product.  It’s a necessity that happens once to each human being.  Market share and customs might shift, but it is impossible to create a higher demand for the product — you can only die once.   And, as traditional funeral homes raise prices to cover always incurring inflationary costs some consumers choose lower priced services to counter those price increases.  So, in some equations, even if you do more services, actual revenue could be less because clientele may be choosing lower priced options.  It’s one reason that increasing revenue is getting tougher and tougher to find.

Couple that with the expanding options of Death Care in the niche fields of natural organic reduction, alkaline hydrolysis, and other areas such as non-funeral home operated memorial services and you can see why an increase in revenues might be hard to find in the future.

I think this thought process is a stark reminder to those in the traditional funeral and cremation business that while you have to continue to control expenses to maintain margins you also need to be looking out on your flanks and be concerned about the potential for the loss of, or at least, slower growth of revenue.

In my opinion, those can be sobering thoughts to traditional funeral home businesses that have a long history of high margins from the sale of traditional services and merchandise for decades.  Smart business management is necessary now more than ever before to keep the profits rolling in.

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There has been a lot written about the stock markets in the two weeks of the Presidency of Donald Trump.  So much seems to depend on what the item of the day with President Trump is and that item seems to move markets one way or another.

I’m an amateur investor and I pay attention to what is happening in the markets. I’m also a long-term investor and pick companies to invest in that I have researched and believe that their stock value (company value) will be worth more ten years from today than the company is worth today.

I’ve said before in this column that I’ve bought and held stocks for a long-term and have been rewarded for my patience in companies gaining  value over that time.  I have a certain group of stocks that I hold as my “Long-Term” or “Forever” stocks because I believe that the companies will gain value over time.

One such company is Service Corporation International. Regardless of what you think of SCI, the company has rewarded long-term shareholders with stock appreciation that has averaged 21.71% growth (not including dividends) over the past ten years according to Seeking Alpha data.

And, when I look at some of my other forever stock hold cornerstone companies such as Berkshire Hathaway, McDonalds, and Mastercard, I am reminded that, in relation to those companies, my investment in SCI has been every bit as rewarding as most of them.

However, when I checked on Wednesday, another stock I hold in the Death Care business and a part of the Death Care Index (DCI), Security National Financial Corporation (SNFCA), has provided an even better return over the past ten years than SCI.  I find that extremely interesting because SNFCA is no where near as well-known as SCI.  It is a company that seems to have a lot less public profile in the industry/profession than SCI, but seems to get the results just the same.

As you can see from the chart below, SNFCA has returned, according to Seeking Alpha, an annual return of 25.02% to its shareholders for the 10-year period ended February 4, 2025.

Ten-Year and Annual Average Stock appreciation growth of the DCI.  Exclusive of any dividends that may be paid.

Interestingly, Security National Financial is entering its 60th year of business in 2025.  Their website, which you can access here, tells that story.

The Security National Financial Corporation business model rests on three distinct legs — Security National Life Insurance Company which serves the Death Care profession through preneed and its C&J Financial unit which deals in assignment funding,  Memorial Mortuaries and Cemeteries which serves the consumer public with Death Care services, and Security National Mortgage Company which is a full-service lender offering in-house underwriting.

The company, which started out in a rented home in 1965, continues to be based in Salt Lake City, Utah.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Service Corporation International, Security National Financial Corporation, and Carriage Services.

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“A servant’s attitude guided by Christ leads to a significant life”