Last week, a friend of mine died of a heart attack. Another friend has malignant lymphoma. I keep hearing about friends and acquaintances in their forties, fifties, and sixties [which I consider to be relatively young ages], either dying or getting some terrible disease, such as Parkinson’s or cancer. Although it’s sad and depressing, we have to accept the fact that death is a fact of life.
With the baby boom getting older, the demand for products and services from ‘death stocks’ is practically guaranteed to increase. Here are a few stocks that may prosper from the ageing of the American population.
Matthews International Corp. (MATW) manufactures and markets cast bronze memorials, wood and metal caskets, cremation equipment, and other related products. They have a P/E of 19.5 and a price sales ratio of 1.8. Last Friday, they announced a 2.5 million buyback. They pay a small yield of .6%.
Hillenbrand Industries Inc. (HB), which is based in Batesville, Indiana has a subsidiary in the funeral service business, which makes and markets caskets, cremation containers and urns. They also have other divisions in the medical technologies and health care industry. The P/E is 16.7 and the P/S is 1.9 and the PEG is 1.9. Their yield is 1.9%.
The Houston, Texas based company, Service Corp. International (SCI) owns funeral homes, cemeteries, and crematoriums in the United States, Canada and Germany. They have a fairly high P/E of 63, a P/S of 2, and a PEG of 2.5. Dividends are providing a yield of about 1%.
Another Houston based company Carriage Services Inc. (CSV) is also in the casket, funeral, and cremation business. Earnings have been negative but forward P/E is 17.7. Price sales is 1 and PEG is 1.9. Their earnings announcement will be on May 2.
Stewart Enterprises Inc. (STEI) is another company, based in Louisiana, that owns funeral homes and cemeteries. P/E is 20.3, P/S is 1.5, and PEG is 3. They pay a yield of 1.3%.
A Pennsylvania company, Stonemor Partners LP (STON), specializes in the ownership and operation of cemeteries. They have a very high yield of 76, and an extremely high PEG of 43. However, the stock does have a yield of 7.75. The stock is structured as a limited partnership.
Author does not own any of the above.
Death industry stocks could face their biggest growth spurt about 20 years down the line as the baby-boomer population enters the "high probability of death" category.It would be interesting to take a look at current demographics and some mortality tables to figure out exactly when this will occur.I would think that if are lifestyles are healthier than before and our odds of living longer go up each year,then maybe the 20 years should be pushed out a bit.I wonder if you could project a death trend rate forward? With the increase in wealth in our generation, we should see a higher per capita rate of expenditure in funeral expenses.
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