I was again reminded of stock guru Peter Lynch and his affinity for “boring investments” when I looked at the 2025 3rd Quarter results for Service Corporation International that were issued last week.  Lynch, who you may know, was the broker/analyst/investor who led the mutual fund Fidelity Magellan to a 29.2% annual rate of return from 1977 to 1990 and wrote a book called “One Up on Wall Street” where he told of how he made his stock selections.

I read that book a long time ago and it gave me a solid foundation for investing.  According to Gemini artificial intelligence here’s what Lynch’s philosophy with a company such as Service Corporation International (SCI) was/is :

“In One Up on Wall Street, Peter Lynch uses the analogy of plastic knives and forks to illustrate his preference for boring, low-growth industries. While he doesn’t explicitly link the “plastic knives and forks” quote to Service Corporation International (SCI), he mentions the funeral business as an example of an unglamorous, no-growth industry that is often overlooked but can produce big winners.”

When one looks at SCI’s 3rd quarter return in relation to the high-flyer companies such as Nvidia, Broadcom, Apple, and the like it’s downright boring. . . . . but, as Lynch explains, provides growth over time.  In the company’s 3rd Quarter 2025 Financial Report that you can access here, here is what SCI reported:

• Revenue grew $44.1 million, or 4.4%, over the third quarter of 2024
• Gross profit increased $12.9 million, or 5%, in the current quarter
• Comparable total funeral sales average grew 3.1% over the third quarter of 2024 supported by 13.4% growth in non-funeral home sales average
• Cemetery preneed sales production increased 9.6% in the current quarter

Here’s how Tom Ryan, SCI’s Chairman and CEO  reacted to those numbers and anticipated the future in a prepared statement in the company’s press release, “We are proud to report adjusted earnings per share of $0.87 and net cash provided by operating activities of $252.3 million. Strong performance in our cemetery segment was led by an increase in preneed cemetery sales production of 10%, which drove growth in comparable cemetery revenue of 7% and cemetery gross profit of 12%. An increase in our comparable core funeral average was offset by the anticipated decline in comparable core funeral services performed. In addition, our non-funeral home sales average increased 13.4%, far outpacing the slight decline in non-funeral home services performed. Finally, our core funeral preneed sales production increased 9% with increases in both insurance and trust production. Based on these strong results, we are well positioned to have a strong finish to the year.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:   When you are the biggest at anything lots of people take notice of your performance.  And there is no doubt that SCI is, by far, the largest player in the Death Care business.  My guess is that their Revenue of over $4 billion is probably about 10 times more than there largest competitor so they are very large.

However, they continue to refine their business model so that they are churning out profits even as Death Care is changing.  SCI seems to stay profitable and roll (and adjust) with the waves of changing funeral and cemetery consumer preferences.  With that said, there is no guarantee that that track record can continue and that is what makes investing such an interesting proposition.

I see some “warning trends” that need watching.  Like other funeral home providers who have seen clientele change their selections and methods of disposition, celebration, and memorialization, I think that is starting to happen with SCI properties as well.

If you look at their “Consolidated Funeral financials” they have a line-item named “Non-Funeral Home Revenue”.  They define that line-item as such, “Non-funeral home revenue represents services sold on a preneed or atneed contract through one of our non-funeral home sales channels (e.g. SCI Direct) and performed once death has occurred”.

If you look at the 3rd Quarter Consolidated Funeral Revenue numbers you will see that “At Need” Revenue dropped by about $4.1 million and that “Non-Funeral Home Revenue” increased by about $3.0 million.  That is somewhat insignificant but does also go with a trend that I noticed that shows that “Non-Funeral Home Revenue” was about 4.0% of “Total Consolidated Funeral Revenue” in last year’s report of  2024 9-month numbers and in the 9-month 2025 numbers is was 4.4% and finally in the latest 3Q25 report it was 4.6% of that total.

“Non-Funeral Home” Revenue is probably a growing aspect of SCI’s business. . . and that is great if it does not also reflect a change of choice from traditional at-need revenue which I believe it probably does.

That indicates to me that there probably is a trend moving away from “Traditional” At-Need services to a more “Low Cost” At-Need Services that will continue to happen over time.  And, just like cremation in the USA started with a small percentage of users it eventually grew at a fairly rapid pace over time.  . . . . . And, I think the switch to “Non-Funeral Home Providers” such as Direct Cremation outlets will follow that trend over the next decade and beyond.

The good thing for SCI if that happens is that they are positioned with low-cost cremation providers in their network of operations.  However, it is something to think about for your own traditional funeral home operation.

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There is no doubt that while many investors (and President Trump) have waited for the Federal Reserve to set lower interest rates going forward and negotiated tariff rates lots of other investors have simply stayed invested and have found gains in the stocks of the S&P 500, the Dow Jones Industrial Average, and Nasdaq.  Those indexes have returned gains of 10.4%, 7.1%, and 12.6% respectively year-to-date (up to September 5) in 2025.

And, of course, if you had invested in the Morningstar Global Next Generation Artificial Intelligence Index, that you can read about here, your investment would have grown 26.4% year-to-date up to September 5.

However, if you had put your money into the four stocks that comprise the Funeral Director Daily Death Care Index (DCI) from January 2 to September 5, 2025, you would be sitting on a negative return of just less than 1% for the same time period.  The unscientific Death Care Index is comprised of owning one share of stock of each of four public companies that have at least a portion of their revenues coming from Death Care.

Those stocks are Service Corporation International, Carriage Services, Matthews International, and Security National Financial Corporation (SNFC).  The DCI had a cumulative value on January 2, 2025 of $155.13 and on September 5, 2025, virtually two-thirds through the calendar year, the DCI rests at a cumulative value of $153.88  —  for a decrease in value of just under 1%.

Here’s a graphic of the information contained above:

Carriage Services bucks the trend — Carriage Services stock value increased in the time period from $39.02 per share to $42.74 per share, an increase of 9.53%.  As you can see from the chart above they were the only DCI stock to have a measurable gain for 2025’s first eight months.

This article from Yahoo Finance reports keys that management mentioned in their 2nd Quarter 2025 remarks that led to that increase.  Included among those key factors were:

• Funeral Segment volume growth
• Strong Preneed sales momentum
• Overhead Cost reductions
• Portfolio repositioning — The divestiture of non-core assets (presumably funeral home and cemetery facilities) coupled with the acquisitions of “higher growth, high-margin properties” (presumably funeral home and cemetery facilities).

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

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CANA Releases 2025 Annual Cremation Statistics Report: Shows National Cremation Rate Growth Slowing

WHEELING, IL— The Cremation Association of North America (CANA) continues its commitment to providing accurate and comprehensive cremation statistics to the death care industry and consumers. With over 25 years of data collection from state and provincial vital statistics departments, CANA’s cremation statistics are widely regarded as the most reliable and current in the field. The latest reports for 2025 have been released, featuring final 2023 cremation data, newly released 2024 data, and projections to 2029 and 2034. 

CANA’s research shows that the national cremation rate has grown steadily and predictably for the last 50 years, indicating that neither the recession nor the pandemic have influenced the growth rate on a national level. After decades of rapid growth in the United States, CANA can confirm that the national growth rate is slowing after reaching 61.8% in 2024. It is a common statistical occurrence for the growth rate to slow once it hits 80%. 

SLOWER, BUT STEADY GROWTH IN CREMATION NATIONALLY  

CANA’s 2025 Annual Statistics Report shows that the annual cremation growth rate is slowing overall. This supports the association’s observation over the past few years that the US is entering a “deceleration” period of cremation. The US is 15 years behind Canada, where the cremation rate surpassed 76.7% in 2024.  

By 2033, CANA research predicts the cremation rate in all states will reach or exceed 50%, with the national rate surpassing 70%. In 2025, there are only six states where the cremation rate has not yet reached 50%; six states and four provinces have already surpassed 80%. After adding a new color to the popular “heat” maps of cremation rates to highlight the individual states and provinces with cremation rates above 80%, CANA has now retired the color that indicated states where the cremation rate had not reached 30%. 

“These cremation statistics can be applied to a range of business decisions, helping you to weigh your options in a number of ways,” said CANA President Ryan Wiseman, co-owner of Porter Funeral Homes in Kansas City, KS, and Lenexa, KS, and the Cremation Society of Kansas and Missouri, which has four locations around the Kansas City area. “I can speak from personal experience about the value and practical application for this information when you’re looking for help to guide the choices you make on behalf of your business. The CANA statistics were fundamental in helping us make the decision to open our Cremation Society location 20 years ago. Based on the data in CANA’s annual report, we were able to project what the future was to bring and estimate what families would be looking for when a loved one would die.” 

OTHER FORMS OF DISPOSITION 

CANA tracks data on all forms of disposition, including the newest forms of cremation – alkaline hydrolysis (AH, also known as water cremation) and natural organic reduction (NOR, also known as human composting). Practitioners, consumers and media outlets often ask about the effect of new forms of disposition on the cremation rate, but CANA’s estimated data shows that AH and NOR processes remain a negligible factor at this point. They account for 0.3% in states where the methods are practiced and 0.1% nationally. AH and NOR are not currently affecting the cremation rates at the state, provincial or national levels. 

ABOUT CANA RESEARCH 

The Cremation Association of North America (CANA) publishes the Annual Cremation Statistics Report and other research to illuminate trends in the profession. This research is often used by the media to shape their articles and by CANA’s members to guide their future business plans. Derived from six data models, CANA publishes projections with accuracy, leaning conservative, to deliver reliable information to the leaders of the profession. 

In addition to the Annual Statistics Report, CANA will be conducting several other research projects to provide insights into cremation arrangement practices, modern cremation practices, and consumer awareness and preference for traditional and emerging disposition methods. The association remains committed to gathering accurate and comprehensive cremation statistics to serve the needs of the death care industry and consumers. 

CANA research is available exclusively for members of the association. For more information on CANA’s statistics, visit www.cremationassociation.org/IndustryStatistics. 

CANA Members can read the full report in The Cremationist or log in to www.cremationassociation.org/CremationistMagazine. 

### 

About CANA 

Founded in 1913, the Cremation Association of North America (CANA) is an international organization of over 3,700 members, composed of funeral homes, cemeteries, crematories, industry suppliers, and consultants. CANA members believe that cremation is preparation for memorialization. 

Service Corporation International (SCI) reported their 1st Quarter 2025 financial results last week and in doing so showed an overall revenue increase of 2.8% in year over year results.  Total Revenue for the quarter was $ 1.074.2 billion as compared to the 1st Quarter of 2024 which came in at $ 1.045.4 billion.

Those revenue numbers led to an overall improvement in Operating Income of about $ 19 million for the quarter.  The operating income margin also improved to 23.4% from the 1Q2024 mark of 22.2%.

Tom Anderson
Funeral Director Daily

In my opinion, what was really strong for the company was the performance of the funeral side of the business.  In what SCI terms “Comparable Funeral Results” — a term for a comparison of the funeral side of businesses that were operating in both comparable quarters — revenues increased a total of 3.9%.  The actual numbers were revenue of $ 625.9 million in 1Q25 as compared to revenues of $ 602.6 million in 1Q24.  (Comparable results don’t include revenue from new acquisitions or disposed of properties)

And, it was a “double-barrel” increase as both the number of services performed increased as did the revenue per service.  SCI reported that the number of services performed in 1Q25 was 95,624 as compared to the number in 1Q24 of 93,967 — a 1.8% increase.

They also reported that the revenue per service grew 2.3% from $ 5,613 per service in 1Q24 to $ 5,743 per service in 1Q25 — that’s an increase of 2.3%

Tom Ryan
SCI CEO

Here’s what SCI CEO Thomas Ryan said in a prepared statement from the 1Q2024 Earnings press release which you can access here, “This was driven by strong performance in our funeral segment with year over year increases in the number of services performed and average revenue per funeral . . . .  . Additionally, effective cost management drove solid gross profit performance and margin expansion.” 

On the flip side of that report, the “Comparable Cemetery” results were not as impressive.  Revenue, gross profit, and gross profit margin all declined from what was reported one year ago in 1Q2024.  The numbers for those categories in 1Q2025 were reported as such:

• Comparable Cemetery Revenue :  $ 432.9 million (Compared to $440.7 million in 1Q2024)
• Comparable Cemetery Gross Profit:  $ 136.8 million (Compared to $142.6 million in 1Q2024)
• Comparable Cemetery Gross Profit Margin:  31.6% (Compared to 32.4% in 1Q2024)

Here’s what CEO Ryan said in a prepared statement that was aimed at the cemetery segment, “In the cemetery segment, we are continuing to focus on production, which will benefit us in future periods, as undeveloped property sold is constructed.”

It should also be noted that Preneed production mostly slipped in 1Q2025 also.  However, it should be pointed out that the preneed sales staff is in the process of moving from a trust based system where some revenue is counted upon early delivery to an insurance based product, with their new alliance with Global Atlantic Insurance, where most of the revenue will not be counted until delivery at need.

I think it will be very difficult to comprehend how the actual preneed numbers are for SCI until they have at least one full year of comparables in the insurance-based operating model under their belts.  At this point they are, in my opinion, in a transitionary process.

On preneed however, SCI did report average preneed contracts moving up 1.1% in dollar volume.  One might wonder, however, if that actually portends a trend of less services being purchased in the future because 1.1% is certainly not keeping up with inflation.

Finally, in CEO Ryan’s opening statement he did mention acquisitions.  Here’s what he said on that subject, “. . . our robust cash flow has allowed us to continue investment toward our extensive pipeline of acquisitions while also providing us the flexibility to be opportunistic with stock repurchases.”

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

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New Gallup Honesty and Ethics Poll Shows Funeral Directors in “Net Positive” 

There’s plenty of data in Gallup’s 2025 Honesty and Ethics of Professions Ratings results to put a smile on the face of any funeral director. A “net positive” rating and an admirable ranking among the 23 included professions are just the start. And you shouldn’t let the fact that the news networks are using these results to decry the fact that Democrats are “held in lower esteem than lawyers, undertakers, and car salesmen” steal your sunshine.

The survey

From December 2-18, 2024, Gallup surveyed 1,0003 American adults from all 50 states, asking them how they would rate the honesty and ethical standards of the people in each of the 23 included occupations. The rating scale options were very high, high, average, low, or very low. 

The results placed those occupations in order of net percent high (high/very high rankings minus low/very low rankings) at the top, with nurses, grade-school teachers, military officers, pharmacists, and medical doctors all receiving 53% high or very high ratings and placing them in a “majority positive” section.

Funeral directors ranked seventh in the survey with a 37% high or very high rating, placing you in the “net positive category” above police officers, auto mechanics, clergy, and judges and trailing behind daycare providers. Directors also received a relatively small low/very low rating of 9%, which is lower than the low/very low rating of grade-school teachers and medical doctors. In 2021, funeral directors had a 39% high/very high rating, resulting in a 2% decrease.

On the very bottom of the list are the usual suspects: lobbyists, members of Congress, and TV reporters. Overall, reports Gallup, the list hasn’t changed much since the first survey in 2000 (incidentally, funeral directors weren’t added to the survey until 2018).

Four surveys

Over the last week, two of the major news networks shared the results of two separate surveys that indicated that Americans aren’t exactly happy with the job the Democratic party is doing. A CNN poll “put favorability at 29% — the lowest rating in the 33-year history of the survey” while an NBC News poll showed a 27% approval rating for the party.

To seemingly underscore the unbelievable horror of these results, some outlets took to comparing them to other survey results. For example, the New York Post said this:

• “Democrats have become so unpopular that more Americans believe that aliens are among us than agree with the Democratic Party,” and
• “Dems are now held in lower esteem than lawyers, undertakers, and car salesmen.”

The first quote references a 2020 survey about Americans’ belief in conspiracy theories (think: Sasquatch, Bigfoot, and the Loch Ness monster), while the second refers to the previously-mentioned Gallup poll.

If their point is to make funeral directors feel inferior to (or at least as low as) the Democrats, it won’t work. You guys are trusted and ethical and amazing, and Gallup’s poll proves that.