Wednesday, August 01, 2012

Why Starbucks is a Death Stock

Death stocks are companies involved in the business of cemeteries, cremation, coffins, funeral parlors, and headstones. So what is the connection that Starbucks (SBUX) has with this industry? The company is putting one of its gourmet coffee shops in a funeral home! The Robinson Funeral Home in Easley, South Carolina plans to open a Starbucks in its facilities during the month of August. This gives a whole new meaning to the term 'Waking the dead.'
But seriously, this is an industry that won't go away, the 'inevitable death and taxes' situation. There are many plays in this sector, and according to the free list at, there are ten companies in the death business. For example, Matthews International (MATW) is in the business of memorialization products for cemeteries. The company produces manufactures cast bronze and granite memorials, cast and etched architectural products, mausoleums, and wood and metal caskets. The stock trades at 13.3 times present earnings and 11.5 times future earnings. It sports a yield of 1.2%.
Service Corporation International (SCI) is the largest funeral service company by market cap. The company also owns cemeteries and crematoria, and even sell s caskets. The company pays a decent yield of 1.9%, and trades at 16.3 times forward earnings.
Hillenbrand (HI) is the largest publicly traded casket manufacturer, which also makes cremation caskets, containers, vaults, and urns. The forward price to earnings ratio is 9.4, and the yield is a generous 4.4%.
To access a free list of all the death stocks, which can be downloaded, sorted, and added to, go to
Disclosure: Author didn't own any of the above at the time the article was written.

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