SERVICE CORP INTERNATIONAL (SCI) Stock Fundamental Analysis
NYSE:SCI - New York Stock Exchange, Inc. - US8175651046 - Common Stock - Currency: USD
SCI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 71 industry peers in the Diversified Consumer Services industry. While SCI has a great profitability rating, there are quite some concerns on its financial health. SCI has a correct valuation and a medium growth rate. SCI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
SCI had positive earnings in the past year.
In the past year SCI had a positive cash flow from operations.
Each year in the past 5 years SCI has been profitable.
Each year in the past 5 years SCI had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.06%, SCI is in the better half of the industry, outperforming 60.56% of the companies in the same industry.
Looking at the Return On Equity, with a value of 32.11%, SCI belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.45%, SCI is doing good in the industry, outperforming 66.20% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SCI is significantly below the industry average of 10.64%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.06% | ||
| ROE | 32.11% | ||
| ROIC | 4.45% |
ROA(3y)3.34%
ROA(5y)3.74%
ROE(3y)33.19%
ROE(5y)34.21%
ROIC(3y)4.6%
ROIC(5y)4.88%
1.3 Margins
SCI has a better Profit Margin (12.58%) than 80.28% of its industry peers.
SCI's Profit Margin has improved in the last couple of years.
SCI's Operating Margin of 22.90% is amongst the best of the industry. SCI outperforms 92.96% of its industry peers.
SCI's Operating Margin has improved in the last couple of years.
The Gross Margin of SCI (26.28%) is worse than 69.01% of its industry peers.
In the last couple of years the Gross Margin of SCI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.9% | ||
| PM (TTM) | 12.58% | ||
| GM | 26.28% |
OM growth 3Y-6.86%
OM growth 5Y2.99%
PM growth 3Y-13.86%
PM growth 5Y1.61%
GM growth 3Y-6.56%
GM growth 5Y2.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SCI is destroying value.
SCI has less shares outstanding than it did 1 year ago.
The number of shares outstanding for SCI has been reduced compared to 5 years ago.
The debt/assets ratio for SCI has been reduced compared to a year ago.
2.2 Solvency
SCI has an Altman-Z score of 0.88. This is a bad value and indicates that SCI is not financially healthy and even has some risk of bankruptcy.
SCI has a Altman-Z score of 0.88. This is comparable to the rest of the industry: SCI outperforms 50.70% of its industry peers.
The Debt to FCF ratio of SCI is 7.44, which is on the high side as it means it would take SCI, 7.44 years of fcf income to pay off all of its debts.
SCI's Debt to FCF ratio of 7.44 is fine compared to the rest of the industry. SCI outperforms 64.79% of its industry peers.
SCI has a Debt/Equity ratio of 2.87. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SCI (2.87) is worse than 74.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 7.44 | ||
| Altman-Z | 0.88 |
ROIC/WACC0.55
WACC8.05%
2.3 Liquidity
SCI has a Current Ratio of 0.51. This is a bad value and indicates that SCI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.51, SCI is not doing good in the industry: 77.46% of the companies in the same industry are doing better.
SCI has a Quick Ratio of 0.51. This is a bad value and indicates that SCI is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of SCI (0.46) is worse than 77.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.96% over the past year.
SCI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.79% yearly.
Looking at the last year, SCI shows a small growth in Revenue. The Revenue has grown by 2.40% in the last year.
SCI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.32% yearly.
EPS 1Y (TTM)4.96%
EPS 3Y-8.25%
EPS 5Y13.79%
EPS Q2Q%7.87%
Revenue 1Y (TTM)2.4%
Revenue growth 3Y0.35%
Revenue growth 5Y5.32%
Sales Q2Q%2.75%
3.2 Future
Based on estimates for the next years, SCI will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.00% on average per year.
SCI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.54% yearly.
EPS Next Y8.27%
EPS Next 2Y9.28%
EPS Next 3Y11%
EPS Next 5YN/A
Revenue Next Year2.63%
Revenue Next 2Y3.01%
Revenue Next 3Y3.54%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
SCI is valuated rather expensively with a Price/Earnings ratio of 22.44.
66.20% of the companies in the same industry are more expensive than SCI, based on the Price/Earnings ratio.
SCI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
SCI is valuated rather expensively with a Price/Forward Earnings ratio of 19.16.
SCI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SCI is cheaper than 63.38% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, SCI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.44 | ||
| Fwd PE | 19.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SCI is valued a bit cheaper than 61.97% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SCI is valued a bit cheaper than the industry average as 77.46% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.73 | ||
| EV/EBITDA | 12.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SCI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.71
PEG (5Y)1.63
EPS Next 2Y9.28%
EPS Next 3Y11%
5. Dividend
5.1 Amount
SCI has a Yearly Dividend Yield of 1.59%. Purely for dividend investing, there may be better candidates out there.
SCI's Dividend Yield is rather good when compared to the industry average which is at 3.85. SCI pays more dividend than 90.14% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.35, SCI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
5.2 History
On average, the dividend of SCI grows each year by 10.53%, which is quite nice.
SCI has been paying a dividend for at least 10 years, so it has a reliable track record.
SCI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.53%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
SCI pays out 33.26% of its income as dividend. This is a sustainable payout ratio.
SCI's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP33.26%
EPS Next 2Y9.28%
EPS Next 3Y11%
80.77
+0.02 (+0.02%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners91.59%
Inst Owner Change0.24%
Ins Owners2.74%
Ins Owner Change0.85%
Market Cap11.50B
Analysts84
Price Target90.65 (12.23%)
Short Float %4.14%
Short Ratio5.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
Yearly Dividend1.2
Dividend Growth(5Y)10.53%
DP33.26%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.41%
Min EPS beat(2)0.14%
Max EPS beat(2)4.68%
EPS beat(4)3
Avg EPS beat(4)-0.95%
Min EPS beat(4)-9.68%
Max EPS beat(4)4.68%
EPS beat(8)7
Avg EPS beat(8)1.71%
EPS beat(12)11
Avg EPS beat(12)5.12%
EPS beat(16)15
Avg EPS beat(16)15.35%
Revenue beat(2)1
Avg Revenue beat(2)0.06%
Min Revenue beat(2)-0.18%
Max Revenue beat(2)0.3%
Revenue beat(4)1
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-1.17%
Max Revenue beat(4)0.3%
Revenue beat(8)5
Avg Revenue beat(8)0.71%
Revenue beat(12)8
Avg Revenue beat(12)1.73%
Revenue beat(16)12
Avg Revenue beat(16)4.14%
PT rev (1m)0.17%
PT rev (3m)0.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.35%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.44 | ||
| Fwd PE | 19.16 | ||
| P/S | 2.73 | ||
| P/FCF | 17.73 | ||
| P/OCF | 11.1 | ||
| P/B | 6.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.4 |
EPS(TTM)3.6
EY4.46%
EPS(NY)4.22
Fwd EY5.22%
FCF(TTM)4.55
FCFY5.64%
OCF(TTM)7.28
OCFY9.01%
SpS29.61
BVpS11.6
TBVpS-3.06
PEG (NY)2.71
PEG (5Y)1.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.06% | ||
| ROE | 32.11% | ||
| ROCE | 5.84% | ||
| ROIC | 4.45% | ||
| ROICexc | 4.52% | ||
| ROICexgc | 5.18% | ||
| OM | 22.9% | ||
| PM (TTM) | 12.58% | ||
| GM | 26.28% | ||
| FCFM | 15.38% |
ROA(3y)3.34%
ROA(5y)3.74%
ROE(3y)33.19%
ROE(5y)34.21%
ROIC(3y)4.6%
ROIC(5y)4.88%
ROICexc(3y)4.67%
ROICexc(5y)4.95%
ROICexgc(3y)5.58%
ROICexgc(5y)5.93%
ROCE(3y)6.04%
ROCE(5y)6.4%
ROICexcg growth 3Y-10.1%
ROICexcg growth 5Y2.9%
ROICexc growth 3Y-9.94%
ROICexc growth 5Y3.38%
OM growth 3Y-6.86%
OM growth 5Y2.99%
PM growth 3Y-13.86%
PM growth 5Y1.61%
GM growth 3Y-6.56%
GM growth 5Y2.05%
F-Score6
Asset Turnover0.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 7.44 | ||
| Debt/EBITDA | 3.65 | ||
| Cap/Depr | 116.61% | ||
| Cap/Sales | 9.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.82% | ||
| Profit Quality | 122.29% | ||
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.46 | ||
| Altman-Z | 0.88 |
F-Score6
WACC8.05%
ROIC/WACC0.55
Cap/Depr(3y)121.12%
Cap/Depr(5y)111.78%
Cap/Sales(3y)9.04%
Cap/Sales(5y)8.15%
Profit Quality(3y)94.08%
Profit Quality(5y)94.38%
High Growth Momentum
Growth
EPS 1Y (TTM)4.96%
EPS 3Y-8.25%
EPS 5Y13.79%
EPS Q2Q%7.87%
EPS Next Y8.27%
EPS Next 2Y9.28%
EPS Next 3Y11%
EPS Next 5YN/A
Revenue 1Y (TTM)2.4%
Revenue growth 3Y0.35%
Revenue growth 5Y5.32%
Sales Q2Q%2.75%
Revenue Next Year2.63%
Revenue Next 2Y3.01%
Revenue Next 3Y3.54%
Revenue Next 5YN/A
EBIT growth 1Y4.67%
EBIT growth 3Y-6.53%
EBIT growth 5Y8.47%
EBIT Next Year41.6%
EBIT Next 3Y15.66%
EBIT Next 5YN/A
FCF growth 1Y101.25%
FCF growth 3Y-3.42%
FCF growth 5Y7.41%
OCF growth 1Y45.27%
OCF growth 3Y0.87%
OCF growth 5Y8.49%