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6 Stocks to Die For: Making a Killing in Caskets, Funerals, and Cemeteries

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What one might think of as the ultimate safe haven category has often proven vulnerable to wild market swings and scandals. Forecasts now call for steady growth, however.

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6 "Death Stocks" to Consider

Below, then, are half a dozen stocks for when you go six feet under.

1. The death of Whitney Houston was the single most Googled event of 2012, but, in the death care business, it is Houston, Texas, that literally has the last word. Space City is home to Service Corporation International, easily the giant of the industry with a market cap of about $3.5 billion. The firm was founded in 1962 and, in addition to owning approximately 1,437 funeral service locations in this country, it has a considerable presence in Canada and Germany. It commands a market share of about 12% in an intensely fragmented business and the firm's Rose Hill Memorial Park in California sprawls over an other-worldly 2,500 acres. Service's "Dignity Memorial" network was also an early pioneer in the now-ubiquitous trend toward national branding. The stock, having halted dividends for six straight years starting in 1999, currently yields about 1.42%, and shares have risen roughly 50% since April 2012.

2. Louisiana-based Stewart Enterprises Inc. (NASDAQ:STEI) is the sector's second largest name, and its shares have also levitated about 50% in the past 52 weeks. Dating back to 1910, the company boasts a market cap of $766 million with a divided of about 1.64%. Its business operations have a reputation for efficiency and high volume, and last month's first quarter results revealed an 80% increase in earnings per share, and $15.5 million in earnings.

3. Carriage Services is currently the sector's standout stock, having increased almost 200% over the past year to amply compensate investors for a comparatively minuscule 0.46% yield. The firm, whose CEO and founder answers to the ominous name of Mr. Payne, has a small market cap of $390.1 million on only 18.1 million shares outstanding. Established in 1991, Carriage runs 167 funeral homes and 33 cemeteries and its beat-and-raise earnings release in February impressed investors.
funeral  white flowers death industry stocks
4. Stonemor Partners (NYSE:STON) is based in Pennsylvania, a state with America's fourth largest population of elderly people. It has traded about 2.69% higher in the past 12 months, a steady if unspectacular showing, but a plump 9.50% current payout is arguably the real appeal. Not strictly speaking a stock per se, Stonemor is instead structured as a limited partnership, complete with units and distributions. As both a "pass away" play and "pass through" entity, investors will therefore need to be cognizant of life's two certainties with this one. Consult your tax adviser before putting fresh money to work, especially with April 15 imminent. This funeral home owner and operator has steadily raised dividends for several years, although it missed earnings in March and a relative lack of free cash flow, allied to its high debt load, have led many to question the sustainability of its present yield.

5. Hillenbrand, Inc. (NYSE:HI), whose ticker symbol can be seen as somewhat ironic since it is in the business of helping people bid a final goodbye, has returned a healthy 9.59% in the 12 months. The Indiana-based diversified machinery outfit, with a market cap exceeding $1.5 billion, is increasingly branching out into other areas and thus no longer quite the pure play of yesteryear. That said, its Batesville Casket Company is the world's largest manufacturer of such items, commanding a US market share that enviably approaches 50%. Hillenbrand also offers assorted urns and cremation vaults, and its relatively rich 3.09% dividend has grown at an impressive clip in recent times. Still, investors should be aware of a recent changing of the guard, with CEO Kenneth Camp having just announced his departure after 32 years at the company.

6. Matthews International Corporation (NASDAQ:MATW) hails from Pittsburgh, a city indelibly associated with steel industry icon and famous philanthropist Andrew Carnegie. The Scottish tycoon was renowned for saying, "The man who dies rich thus dies disgraced," and any owners of this stock, up a strong 7.38% in the past year and recently trading at fresh 52-week peaks, may now find themselves in the category that attracted his ire. Matthews International, founded in 1850, has outlived customers and competitors alike. With its well-timed purchase of The York Group in 2001, the company vaulted into pole position as a maker of items including memorials and bronze plaques. As visitors to Argentina's storied La Recoleta cemetery can attest, such aspects of the Great Beyond often run extremely grandiose, and represent a lucrative revenue stream. (Not that all of us can afford the opulence of the final - or did I speak too soon? - resting place of Eva Perón.) The stock sports a 1.17% dividend yield and boasts a market cap of just under $1 billion.

And finally, for anyone who finds specific mortuary stocks altogether too creepy, a couple of bona fide category killers offer tangential ways to play the space. Wal-Mart (NYSE:WMT), the world's largest retailer, and Costco (NASDAQ:COST), trading at fresh historic highs this week, have both jumped on the casket bandwagon.

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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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