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1. Company Snapshot

1.a. Company Description

Service Corporation International provides deathcare products and services in the United States and Canada.The company operates through Funeral and Cemetery segments.Its funeral service and cemetery operations comprise funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other businesses.


The company also provides professional services related to funerals and cremations, including the use of funeral facilities and motor vehicles; arranging and directing services; and removal, preparation, embalming, cremation, memorialization, and travel protection, as well as catering services.In addition, it offers funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, online and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise.Further, the company's cemeteries provide cemetery property interment rights, such as developed lots, lawn crypts, mausoleum spaces, niches, and other cremation memorialization and interment options; and sells cemetery merchandise and services, including memorial markers and bases, outer burial containers, flowers and floral placements, graveside services, merchandise installations, and interments, as well as offers preneed cemetery merchandise and services.


Service Corporation International offers its products and services under the Dignity Memorial, Dignity Planning, National Cremation Society, Advantage Funeral and Cremation Services, Funeraria del Angel, Making Everlasting Memories, Neptune Society, and Trident Society brands.As of December 31, 2021, it owned and operated 1,471 funeral service locations; and 488 cemeteries, including 299 funeral service/cemetery combination locations covering 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico.The company was incorporated in 1962 and is headquartered in Houston, Texas.

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1.b. Last Insights on SCI

Service Corporation International's recent performance was driven by strong Q2 earnings, with adjusted EPS growth of 11% year-over-year, beating estimates. The company's robust margin improvement and guidance for $880-$940M in FY25 operating cash flow support ongoing share repurchases. Additionally, the company's stable business model, direct sales transition, and acquisition strategy position it for 5% organic revenue growth from FY26 onward. The company's quarterly cash dividend of 32 cents per share also demonstrates its commitment to returning value to shareholders.

1.c. Company Highlights

2. SCI's Q3 2025 Earnings: A Strong Performance

SCI reported a robust third-quarter 2025 earnings, with adjusted earnings per share (EPS) increasing by 10% to $0.87, beating analyst estimates of $0.83. Cemetery revenue and gross profit saw significant increases, while funeral revenues and gross profits were slightly lower. The company's funeral segment experienced a decline in comparable funeral revenue, primarily due to a 3.5% decrease in core funeral services performed. However, non-funeral home revenue increased by $3 million, driven by a 13.4% increase in the average revenue per service. The cemetery segment reported a 7% increase in comparable cemetery revenue, driven by a $31 million increase, with core revenue being the primary driver.

Publication Date: Nov -02

📋 Highlights
  • Adjusted EPS Growth:: Increased 10% to $0.87, driven by cemetery segment performance.
  • Cemetery Revenue Surge:: Comparable revenue rose $31M (+7%), core revenue as primary driver.
  • Preneed Sales Expansion:: Grew $30M (+10%), with large sales up $8M (+19%) and 13.4% higher avg. revenue per service.
  • Strong Cash Flow & Returns:: $268M adjusted operating cash flow, $123M returned to shareholders (dividends/share buybacks).
  • 2026 EPS Guidance:: 8–12% growth target with 85–90% confidence, supported by $4–$4.25 free cash flow/share and 4–6% CAGR in operating cash flow.

Cemetery Segment Performance

The cemetery segment was a key driver of growth, with preneed sales production growing by $30 million, or almost 10%, and large sales increasing by $8 million, or 19%. Cemetery gross profit grew by $18 million, and the gross profit percentage increased by 160 basis points. The company's focus on educating cremation consumers about available products and services is expected to add a point of growth per year.

Guidance and Outlook

Looking ahead to the remainder of 2025, the company confirmed the midpoint of its normalized earnings per share guidance and narrowed the range to $3.80 to $3.90. The fourth-quarter range is expected to be $1.09 to $1.19 in normalized earnings per share. For 2026, the company targets 8% to 12% EPS growth, with a confidence level of 85% to 90%. Cemetery preneed sales are expected to grow in the low to mid-single digits, driven by large sales and the cremation consumer segment.

Valuation and Cash Flow

SCI's current valuation metrics indicate a P/E Ratio of 22.2 and an EV/EBITDA of 13.46. The company's strong balance sheet and cash flows support its ongoing capital investment program, providing flexibility to invest opportunistically for long-term benefits. The company expects to generate $4 to $4.25 in free cash flow per share, with cash flow from operations growing at a 4% to 6% CAGR. With a dividend yield of 1.51% and a free cash flow yield of 5.28%, SCI presents an attractive investment opportunity.

Growth Prospects

The company's massive backlog sets it apart from competitors, and contracts from it are bigger than new ones. This will lead to incremental growth, and with 4% revenue growth, SCI can see significant margin increases. The insurance transition led to declines in SCI Direct production, but the company expects growth again in '26 off the new base. Analysts estimate next year's revenue growth at 3.5%, indicating a stable outlook for the company.

3. NewsRoom

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Service Corporation International (SCI) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -04

Source: seekingalpha.com

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Buy These 3 Consumer Staple Stocks to Navigate Market Volatility

Dec -02

Source: zacks.com

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NervGen Pharma Announces Expanded CONNECT SCI Study Data Demonstrating Unprecedented Durable Improvement in Function, Independence, and Quality of Life in Chronic Spinal Cord Injury

Nov -24

Source: newsfilecorp.com

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SERVICE CORPORATION INTERNATIONAL PARTNERS WITH NATIONAL ALLIANCE FOR CHILDREN'S GRIEF FOR FIFTH YEAR

Nov -19

Source: prnewswire.com

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Service Corporation International (SCI) Presents at Stephens Annual Investment Conference 2025 Transcript

Nov -19

Source: seekingalpha.com

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SCI Engineered Materials, Inc. Announces Share Repurchase Program

Nov -17

Source: accessnewswire.com

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Service Corporation International (SCI) Presents at UBS Global Healthcare Conference 2025 Transcript

Nov -12

Source: seekingalpha.com

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SERVICE CORPORATION INTERNATIONAL INCREASES QUARTERLY CASH DIVIDEND

Nov -05

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.94%)

6. Segments

Funeral

Expected Growth: 2.5%

Service Corporation International's funeral segment growth is driven by an aging population, increasing death rates, and a shift towards premium funeral services. Additionally, the company's strategic acquisitions and cost savings initiatives contribute to its 2.5% growth rate.

Cemetery

Expected Growth: 3.5%

The 3.5% growth in Cemetery segment of Service Corporation International is driven by increasing demand for funeral services, aging population, and rising death rates. Additionally, the company's strategic acquisitions, expanded pre-need sales, and cost savings initiatives contribute to the growth. Furthermore, the shift towards cremation and memorialization services also supports the segment's growth.

7. Detailed Products

Funeral Services

Service Corporation International provides traditional funeral services, including visitations, ceremonies, and burials, to help families honor their loved ones.

Cremation Services

The company offers cremation services, providing families with a dignified and respectful way to say goodbye to their loved ones.

Cemetery Properties

Service Corporation International owns and operates cemetery properties, offering a peaceful and serene environment for families to visit and remember their loved ones.

Pre-Planning Services

The company offers pre-planning services, allowing individuals to plan and pay for their funeral services in advance, providing peace of mind for themselves and their families.

Memorialization Products

Service Corporation International offers a range of memorialization products, including headstones, markers, and urns, to help families honor and remember their loved ones.

8. Service Corporation International's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Service Corporation International is moderate due to the presence of alternative funeral and cemetery services, but the company's strong brand recognition and diversified services mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the emotional and often urgent nature of funeral and cemetery services, making it difficult for customers to negotiate prices or switch providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's large scale and diversified operations, allowing it to negotiate favorable prices with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the funeral and cemetery industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is moderate due to the presence of several large players in the industry, but Service Corporation International's strong brand recognition and diversified services help to mitigate this threat.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 75.71%
Debt Cost 6.57%
Equity Weight 24.29%
Equity Cost 8.00%
WACC 6.92%
Leverage 311.62%

11. Quality Control: Service Corporation International passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
H&R Block

A-Score: 5.8/10

Value: 5.6

Growth: 6.1

Quality: 5.5

Yield: 7.0

Momentum: 1.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Rollins

A-Score: 5.8/10

Value: 0.7

Growth: 7.1

Quality: 7.5

Yield: 2.0

Momentum: 7.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
SCI

A-Score: 5.7/10

Value: 3.5

Growth: 6.4

Quality: 4.7

Yield: 4.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Frontdoor

A-Score: 5.2/10

Value: 3.5

Growth: 6.7

Quality: 6.6

Yield: 0.0

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
KB Home

A-Score: 4.9/10

Value: 6.2

Growth: 7.1

Quality: 5.0

Yield: 3.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Bright Horizons Family Solutions

A-Score: 3.7/10

Value: 2.5

Growth: 6.0

Quality: 5.5

Yield: 0.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

75.96$

Current Price

75.97$

Potential

-0.00%

Expected Cash-Flows