Seeking Alpha author Daniel Jones made the following comment in this opinion article titled “Carriage Services is coming back to life” published last week about the company:

“. . . I believe that the market is currently underestimating Carriage Services. The business has done a fine job of reorienting itself over the last couple of years, and it clearly is back in growth mode. . “

As is Funeral Director Daily’s policy for financial opinion articles, we will link the article and show some quotes on the article but let the reader make their own decisions as to the opinions given.

Jones makes the following claims at the beginning of the article about Carriage Services:

• “Carriage Services remains deeply undervalued, with strong top-line growth and demographic tailwinds positioning it for long-term success.”
• “CSV’s recent acquisitions and expansion into new markets signal a return to ‘growth mode’ after significant debt reduction and strategic review.”
• “Despite mixed profitability in recent years, 2025 guidance points to higher revenue, improved adjusted earnings, and attractive valuation versus peers.”

Funeral Director Daily will also provide these interesting graphics that accompanied the article for your knowledge:

The continued high fragmentation of the industry allows for more consolidation

America’s aging population creates tailwinds for Death Care providers

Carriage Services location map (As of December 31, 2024)

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Carriage Services.

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

Funeral Director Daily’s analysis of the Death Care Index (DCI) for the 1st Quarter of 2025 shows that the four public companies that comprise the index held up favorably as a whole when compared against the larger followed indexes such as the Nasdaq, the S&P 500, and the Dow Jones Industrial averages.

Editors Note:  This article was ready to go before the markets dropped in value last Thursday and Friday.  I continued to keep it in the que for being published regardless because to me it represented a point in time and how Death Care compared to the rest of the investment world for the period of January 1, 2025 until March 31, 2025, a time period which did not include last Thursday and Friday.

For the quarter the DCI was down in stock price, compared to the first day of the year by about 3.9%.  That number, negative as it was, still beat both the Nasdaq and the S&P 500 and trailed only the composite average of the Dow Jones.  Here’s how those larger indexes fared for the quarter:

• Nasdaq:    -10.3%
• S&P 500:  -4.7%
• Dow Jones Industrials: -0.9%

Here’s a table of how the four companies that comprise the FDD Death Care Index fared:

As you can see, investors in three of the four DCI companies valued the companies at virtually the same valuations as they were valued at the beginning of the year.  The one exception to that fact was that the value of Matthews International dropped almost 20% for the quarter.

To be fair, only about 45-48% of Matthews International’s revenue comes from Death Care.  They are the parent company of Matthews Aurora Caskets and Matthews Cremation as well as offer products in the cemetery memorialization business.

In all fairness to the Death Care market and Matthews International, it was probably not the memorialization segment of the company that lead to the stock drop.  As this article from the Pittsburgh Post-Gazette relates, during the first quarter of 2025 Matthews had both a challenge to its board membership and announced the sale of one of the other non-Death Care companies in its business portfolio.

Matthews Board Chairman Alvaro Garcia-Tunon made this comment in the Post-Gazette article, “We appreciate the constructive dialogue that we’ve had with our shareholders and want to thank them for their feedback and support. That said, we know we have more work ahead to improve performance and deliver the results our shareholders expect from us.”

That same article made note of this situation and wrote of Garcia-Tunon, “He called the results of the vote a “validation of Matthews’ strategy, our board and the leadership of our CEO Joe Bartolacci, as well as the governance actions we have taken in recent years in response to shareholder feedback.”

The Big “Melt-Down” –  As alluded to in the Editor’s note above, the public stock markets had a “melt-down” on Thursday and Friday, more than likely due to the tariffs imposed by President Trump.  The result of that situation, so far, has had the major broad-based market indexes drop by about 10-12% over the two days.

For your information, I put together this small chart of the DCI companies performance in the few days between the end of the 1st Quarter and Friday — a 4-day period.  In comparison to the major indexes, the Death Care Index is down only 6%.  In “relative” terms, that’s again favorable to the broader indexes.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  There’s bound to be some anxiety in the greater markets, not only in the United States but in markets around the world, as President Trump sets his sails on his vision for America’s economy.  I think the the relative stability of the Death Care companies stock prices both for the quarter and during the “Melt-down” indicates that investors don’t believe that the business fortunes of these companies, especially those that deal in services rather than products, will be much affected by President Trump’s greater economic vision.

Disclaimer— The author of this article for Funeral Director Daily holds stock positions in Service Corporation International, Carriage Services, and Security National Financial Corporation.

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

Utah-based Security National Financial Corporation released their 2024 financial results earlier this week and CEO, President, and Chairman of the Board of the company Scott Quist made the following prepared remarks in the company’s press release on the subject:

“2024 marked another year of solid progress for our Company. Our Life Insurance Segment had its best operational year ever, delivering a 25% improvement over 2023 which was its previous best year ever.”

 

“2024 was our Cemetery and Mortuary Segment’s best year ever improving 5% over 2023 which was its previous best year ever. “

 

“It is instructive to note that our Utah based Cemetery and Mortuary group has received the “Best in State” award for the last 7 consecutive years, a very significant recognition of the quality services we provide.”

 

“Our Mortgage Segment delivered a solid performance, decreasing its loss by over $11 million dollars (64%) while increasing its revenue by over 8%. The mortgage industry as a whole continues to be profit challenged”

 

You can access the company’s press release on their 2024 financials here.

• For the year 2024 company revenues increased by 5.0% over 2023.  The company took in revenues of $334.5 million in 2024 as compared to $318.5 million in 2023.

• Earnings before Taxes for the company increased 109% for the same comparable period.  Earnings before Taxes in 2024 totaled $34.1 million in 2024 as compared to $16.3 million for 2023.

• The Cemetery/Mortuary division increased their revenue 3.4% to $33.0 million on the year as compared to $31.9 million for 2023.  Earnings before taxes for the Cemetery/Mortuary division increased by 4.9% to $8.86 million for 2024.

• Security National Financial Corporation has a presence in the Death Care business world operating funeral homes, cemeteries, preneed insurance, and insurance assignment businesses.  They operate outside the Death Care business world via their Mortgage segment.

Disclaimer–The author of this article for Funeral Director Daily is a shareholder of Security National Financial Corporation.

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

Service Corporation International (SCI) reported its 4th Quarter of 2024 as well as its 2024 Year End results last week.  Being as large a Death Care company as they are it is probably as close as one gets to an annual report on the status of Death Care in the North America when one digests their annual results.

Here is the press release from Service Corporation International on their 2024 4Q and 2024 Annual results which was released last week.

Here is what CEO Thomas Ryan said in prepared remarks in the press release, “We are pleased to report a strong finish for the year with adjusted earnings per share growth of 14% in the fourth quarter of 2024. This was driven by revenue growth in both our segments, which translated into solid gross profit performance and margin expansion. Growth in cemetery preneed sales production and higher funeral general agency revenue more than offset a decline in services performed during the quarter . . . . cash flow for the year allowed us to invest $181 million into the acquisition of 26 funeral homes and 6 cemeteries in major metropolitan markets and $62 million into real estate transactions to expand our footprint of funeral homes and cemeteries in our existing markets.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  There is a lot in this report and it takes some time to digest.  And, following the release of the company’s Earnings Call transcript I’ll probably provide more details and have more to say.  For the time being, here are some thoughts that I have. . .

Revenue: Total Revenue for SCI jumped from FY2023’s $4.099 billion to FY2024’s $4.186 billion — an increase of about $87 million or 2.11%.  The company probably also gained margin as the year went on because their 4Q24 revenue jumped 3.6% over the same number for 4Q23.  In my book, especially because they reported less services conducted on the year, that revenue increase is probably indicative of price increases.

SCI does report in their “Consolidated Funeral Segment” that revenue per services jumped to $5,651 in FY2024 over the FY2023 number of $5,536 — an increase of 2.1%.

Service Case Volume:  In the company’s “Consolidated Funeral Segment” results, SCI reports 355,074 services perfermed in FY2024 as compared to 358,873 services performed in FY2023 — a drop of about 1.1%.  From those numbers alone we don’t know if that drop is because of a loss of market share or simply because of less deaths occuring in their market areas.

Matthews International, in their quarterly report last week, explained away a lower unit sales of casket by what they termed as “less deaths”.  That may be correct and the case with SCI’s lower volume, but one might keep an eye on market share — especially when SCI tells us of the acquisition of 26 facilities during the year whose services numbers should also be included.  When contemplating that fact, however, we do not know when during the year, or even if, those acquisitions started contributing to the financial numbers.  In my opinion, however, the reported number of “Services Performed” will be a number worth watching in the future.

In what SCI calls their “Comparable Funeral Results” which is defined by “those businesses owned for the entire period beginning January 1, 2023 and ending December 31, 2024″,  the company shows an even steeper drop in “Services Performed” for the 4th Quarter of 2024.  SCI indicates a drop of 3,366 services performed during the 4th Quarter, compared to the year prior, which translates into a 3.8% decline for the period.

Again, that number being “Same Store” results. . . . is that indicative of a loss of market share or simply a number reflective of less deaths in their market regions?  I believe it is a number worth watching in the future.

Preneed:  In July 2024, SCI announced a new Preneed agreement with Global Atlantic as you can read from this Funeral Director Daily article on the subject.  We believe, that as is common with new partners, implementation to fine-tuned operations will take some time to get to.  In fact, the SCI report offers footnotes on that subject.

However, in reporting their “Comparable Preneed Sales Production” a Total Preneed sales dollar drop of 9.2% for the 4th Quarter of 2024 as compared to the 4th Quarter of 2023 is reported.  That, too, will need to be watched over time to see if the drop is simply in the implementation of a new policy, a change in accounting in moving from trusts to insurance-based preneed, or reflects a market share trend.

It could possibly reflect a market share trend based on the seemingly growing popularity of low-cost and/or online cremation puchases.  My thought is that the drop in preneed revenue could represent lower cremation sales prices to meet growing competition or simply losing clientele to lower priced online cremation providers.  In any case, this number bears watching in future quarterly reports.

Final Thoughts:  When I read these reports with my background in funeral home ownership I realize that the numbers simply give us a “point in time” reflection of a public company.  However, I think that bringing up questions and possibilities about the numbers is how one can “see into the future” to put their funeral home in the best possible situation to win customers in the future.

Disclaimer — The author of this article for Funeral Director Daily is a shareholder of Service Corporation International.

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

It took awhile, but Security National Financial Corporation (SNFC) finally got around to posting the results of the company’s 2023 year just last week.  And, there is no doubt that SNFC’s Memorial Segment was one of the highlights of that report as that segment reported 10% revenue growth and 38% Earnings before Taxes growth as compared to the previous year.

Here’s what Scott Quist, Chairman of the Board, President, and CEO of SNFC said about the Memorial Segment in this press release, “As death rates stabilized throughout 2023, and as we implemented renewed emphasis on operational efficiencies, our Cemetery and Mortuary segment had its best year ever, earning nearly $8,500,000. Needless to say, we are very pleased with those results”.

Quist went on to say, “In our Memorial segment we have added key personnel, who we believe will drive growth and improve operations. To be sure, growth in this environment is expensive, but is nevertheless our goal.”  

The company’s Cemetery and Mortuary segment reached revenues of over $31.9 million for the year and as CEO Quist mentioned, Earnings before Taxes of $8.5 million.

Security National’s Life Insurance Segment, which I believe holds the company’s preneed insurance division and the company’s insurance assignment business,  also posted excellent results with a 9.5% growth in revenues over 2022 and 78% Earnings before Taxes growth.  The division’s earnings moved north of $25 million for 2023 after earning about $14.2 million in 2022.

Finally, it wasn’t all profits for SNFC as the third leg of their business enterprise, the Mortgage Segment, moved to a lower revenue and loss on that revenue for 2023 after being profitable in 2022.  CEO Quist said this of the Mortgage Segment’s struggles, “. . . the increased interest rates continued to have a devastating effect on our mortgage loan business with volumes falling roughly an additional 35% below 2022’s already decreased markets, with the net result being that our Mortgage segment lost $17,500,000″.

All in all, the company’s performance, dragged down by the Mortgage Segment, produced 18% less revenue in 2023 than in 2022 and produced Earnings before Taxes of about $16.3 million in 2023 as compared to 2022’s earnings of $34.3 million.

Funeral Director Daily take:  We’ll confine our comments to the Memorial Segment of SNFC.  Over the last couple of years we’ve seen it grow to a pretty good $31 million revenue division.  Back in 2022, as you can see from this article, Security National Financial Corporation purchased their first funeral home outside of their Utah/Northern California base.

If the 2023 financial results are in any way an indication of how that transaction has worked out you can understand why CEO Quist makes the comment about “growing” being the goal.

We think that SNFC is perfectly situated to make death care growth a reality.  Interest rates won’t be high forever which will bring back the mortgage business to profitability and the life insurance market will also provide available funds to the Memorial Segment in their growh aspirations.  Finally, being a public company they have plenty of ways to access cash to be able to keep costs of acquisitions from being debt heavy.

The company has chosen to be measured, thorough, and patient in their growth decisions. . . .I expect that same modus operandi will prevail as they grow out their death care segments.

Disclaimer — The author of this article for Funeral Director Daily is a stockholder in Security National Financial Corporation.

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

The growth of Propel Funeral Partners of Australia and New Zealand is apparent when you look at the company’s financial report covering the 1st-Half of 2024, ending on December 31, 2023.  In looking at the report you will see that, what is now believed to be the South Pacific’s largest “publicly-held” death care operating company, shows an increase in gross revenue of almost AUS $ 103 million as compared to AUS $ 83.8 million for the Prior Corresponding Period (PCP).  That’s an increase of over 23% in revenue.

Operating EBITDA is also up over 18% compared to the Prior Corresponding Period. . . and funeral case volume is also up over 17%.  You can find that information from this visual power point presentation about the 1st-Half results.

However, as good as those aspects of the report look. . . in looking a little deeper you will see that much of that increase comes from recently acquired businesses as the company comments that while “total funeral volumes were 10,637, up 17.4% on the PCP, comparable funeral volumes contracted by 9.8% on the PCP.”

Propel does illuminate a little about the contraction and say going forward they look to the contraction being temporary because:

• Prior period declines have rebounded quickly;
• The unusually benign winter flu season; and
• The growing and ageing populations in Australia and New Zealand.

On a more positive note, I noticed that Propel’s Average Revenue per Funeral (ARF) had moved up 4.5% overall and 6.0% on a comparative basis. . which seems to indicate that the companies existing funeral homes have been able to increase their prices.  In countries where the cremation rate is 70% (Australia) and 75% (New Zealand) the ability to increase the ARF in cremation cases, where many now are in the Direct Cremation category, is impressive.  It gives hope to cremation providers that the right approach to consumers may be more financially rewarding than many think.

From the power-point presentation data, it appears that Average Revenue per Funeral has been increased by over 10% since 2021.

Other items we learned from the power-point presentation:

• The population of Australia and New Zealand is aging much like the United States demographics.  Death volumes in Australia are expected to increase 2.9% from 2030 to 2040.  In New Zealand they are expected to increase in the same time period by 2.1

• Australian/New Zealand death care providers are consolidating.  Independents are believed to have a 70% market share, down from a 74% market share in 2015.  In the same time period, Propel Funeral Partners believes that they have went from 1% to 9% and they believe the recently taken private largest provider of death care in Australia/New Zealand, InvoCare has dropped from 25% to 21% market share.

• Propel Funeral Partners operates 187 locations in Australia and New Zealand.

• If Propel Funeral Partners would have the same amount of revenue in the 2nd half of 2024 as they did in the first half they would total approximately AUS $ 206 million in annual revenue.  With exchange rates taken into consideration, that would put Propel at about 1/3 the size, based on revenue, of the Carriage Services and Park Lawn Corporation organizations.

Here is the Propel Funeral Partners website from where you can glean more information.

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