Funeral business' slow but inevitable march attracts investors to these stocks

Business

Funeral business' slow but inevitable march attracts investors to these stocks

2024-09-05 20:10 Last Updated At：20:21

NEW YORK (AP) — Death and taxes, the saying goes, are the only certainties in life. If so, funeral companies like Houston's Service Corporation International might look like a sure bet to investors.

The slow-growing but inevitable business is supported by the aging U.S. population: By 2030, the share of population older than 65 will climb to 21%, up from 15% in 2020, according to the Census Bureau.

Service Corporation International and rival Carriage Services have both seen their revenue rise over the past decade. Industry consolidation has helped bolster their pricing power at a time when privately-owned and family-run businesses still dominate. Profit margins have remained relatively steady despite the squeeze from inflation.

The National Funeral Directors Association is forecasting that overall industry revenue will grow at an annualized rate of 1.2%, reaching $20.2 billion in 2029.

Funeral expenses jumped 5.1% in 2023, according to inflation data from the consumer price index. That follows a 3.3% jump in 2022. Even with inflation easing, the factors that drove those big jumps, such as demographic shifts are likely to keep pushing expenses higher. Price increases for services and materials are not likely to reverse.

The median cost of a funeral with burial hit $8,300 in 2023, up from $7,848 in 2021, according to the National Funeral Directors Association. The median cost of a funeral with a cremation cost $6,280 in 2023, up from $5,810 in 2021.

Consumers are massively opting for the cheaper choice for their last earthly purchase: The cremation rate reached 60.5% in 2023, compared with a burial rate of 34.5%, according to the National Funeral Directors Association.

Service Corporation International is by far the bigger publicly-traded funeral company, with 1,490 funeral homes and 492 cemeteries nationwide. Carriage Services, also based in Houston and doing business nationwide, has 164 funeral homes and 31 cemeteries.

Carriage Services is considering more price increases through 2024.

“We can’t suddenly just go 10% increase across the board, so it’s been slowly but surely because we want to balance the price increase with volume,” said Carlos Quezada, CEO of Carriage Services, in a conference call with analysts following its latest earnings results. “We don’t want to lose volume and lose our ability to compete.”

Carriage Services' second-quarter earnings and revenue jumped and beat Wall Street forecasts, while its net profit margin remained relatively steady at just under 6%. The stock is up 30% for the year, far outpacing the broader S&P 500 index.

Service Corporation International reported a slight downturn in second-quarter profit that missed analysts' forecasts, though the company is still expected to report earnings growth overall for the year. It expects prepaid funeral services to help drive growth, along with acquisitions. Its stock is up 14% for the year, closer to the gains for the broader market.

Burrow and the Bengals are bumming again after another last-second loss to Chiefs in Kansas City

2024-09-16 09:09 Last Updated At：09:10

KANSAS CITY, Mo. (AP) — Joe Burrow and the Cincinnati Bengals have walked out of Arrowhead Stadium both elated and dejected over the years. Most of the time it has been January, and they have been playing the Kansas City Chiefs for a spot in the Super Bowl.

There wasn't that same sort of finality on Sunday. But another last-second loss was brutal in its own way.

The Bengals had fought and rallied and fought some more to take the lead on Evan McPherson's fourth field goal with just under 10 minutes to go. And after their defense had forced Kansas City to punt, it was on the verge of another big stop, when a penalty on safety Daijahn Anthony inside the final minute kept the Chiefs' own comeback hopes alive.

A few plays later, Harrison Butker kicked a 51-yard field goal as time expired to give Kansas City a 26-25 victory.

“It hurts,” Bengals coach Zac Taylor admitted, “but I'm really proud of the way we fought. We put ourselves in some really good situations in both halves. The defense getting those takeaways was critical. I’m disappointed that we lost. It was an emotional loss for us. But at the same time, I like where our team’s mental state is right now.”

It was an especially emotional game for Bengals star Ja'Marr Chase, who had to be held back from referee Alex Kemp at one point in the fourth quarter after he thought a penalty should have been called for a hip-drop tackle on him.

It was Burrow who physically dragged his wide receiver away as Kemp threw a flag for unsportsmanlike conduct.

“It's just simply abusive language toward a game official. That's all it was,” Kemp said after the game. “There was really no interpretation. I'm not going to repeat to you what he said, but there was no interpretation with the language that he used.”

Kemp said Chase crossed a line when it became “profanity used by grown men versus direct, personal, abusive language towards a game official. That's the line. When that line gets crossed, we simply can't let that happen in pro football.”

Chase refused to discuss the penalty in the postgame locker room, saying only: “It doesn’t feel great losing.”

“It’s OK to be emotional,” Taylor said. “I can’t see everything that’s said or done, so it’s better that I not comment on it.”

The Bengals still have 15 games ahead of them, but they are already in a deep hole. Their surprising loss to the Patriots in their season opener means they are 0-2, and should Taylor manage to get them turned around and into the playoffs, they now face the prospect of Kansas City holding the tiebreaker over them.

That could mean another matchup in Arrowhead Stadium. Butker's kick on Sunday was the same direction, and almost the same distance, as the 45-yarder he hit against the Bengals for a 23-20 victory in the AFC championship game on Jan. 29, 2023.

There were certainly bright spots for Cincinnati, especially after its performance last week against New England.

Burrow looked much better throwing the ball, finishing with 258 yards passing and two touchdowns. Most importantly, he did not seem to be affected by his bothersome wrist in his second game since having surgery on it.

Burrow did fumble the ball, though, and Chamarri Conner returned it 37 yards for a second-half touchdown.

“I gifted them six points,” Burrow said, "so that was frustrating.”

Both of his touchdown passes went to Andrei Iosivas, who came through as Tee Higgins missed another game with a hamstring injury. Iosivas and tight end Mike Gesicki, who had seven catches for 91 yards, also helped make up for a poor game from Chase, who was limited to four catches for 35 yards and had the silly unsportsmanlike conduct penalty.

That flag was thrown after Chase's reception had set up a manageable third down midway through the fourth quarter. The 15-yard penalty pushed the Bengals back to third-and-22 at the Kansas City 45, and after a 10-yard pass to Gesicki, the Bengals had to kick a field goal for a 25-23 lead with just over five minutes left in the game.

Ultimately, penalties were a big reason why the Bengals came undone. They had eight of them for 79 yards. And while the one against Chase was important, the one against Anthony on fourth down in the final minute was crippling.

“We’ve been here before, unfortunately. We know what this feels like, and we know it’s a long season,” Taylor said. “We know we can get ourselves out of it. Stick together. Get our emotions in check and come back (next week) and play a great game.”

AP NFL: https://apnews.com/hub/nfl