SERVICE CORP INTERNATIONAL (SCI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SCI - US8175651046 - Common Stock
79.57 USD
-0.25 (-0.31%)
SCI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 76 industry peers in the Diversified Consumer Services industry. SCI has an excellent profitability rating, but there are concerns on its financial health. SCI has a correct valuation and a medium growth rate. Finally SCI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- SCI had positive earnings in the past year.
- SCI had a positive operating cash flow in the past year.
- In the past 5 years SCI has always been profitable.
- In the past 5 years SCI always reported a positive cash flow from operatings.
1.2 Ratios
- SCI has a Return On Assets (2.91%) which is in line with its industry peers.
- With an excellent Return On Equity value of 34.12%, SCI belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
- SCI has a Return On Invested Capital of 4.31%. This is in the better half of the industry: SCI outperforms 60.53% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SCI is significantly below the industry average of 10.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.91% | ||
| ROE | 34.12% | ||
| ROIC | 4.31% |
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
- Looking at the Profit Margin, with a value of 12.46%, SCI is in the better half of the industry, outperforming 73.68% of the companies in the same industry.
- In the last couple of years the Profit Margin of SCI has grown nicely.
- With an excellent Operating Margin value of 23.15%, SCI belongs to the best of the industry, outperforming 88.16% of the companies in the same industry.
- SCI's Operating Margin has improved in the last couple of years.
- SCI has a Gross Margin of 26.44%. This is in the lower half of the industry: SCI underperforms 69.74% of its industry peers.
- In the last couple of years the Gross Margin of SCI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.15% | ||
| PM (TTM) | 12.46% | ||
| GM | 26.44% |
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 0.82. 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 0.82. This is comparable to the rest of the industry: SCI outperforms 48.68% of its industry peers.
- The Debt to FCF ratio of SCI is 8.13, which is on the high side as it means it would take SCI, 8.13 years of fcf income to pay off all of its debts.
- SCI has a Debt to FCF ratio of 8.13. This is in the better half of the industry: SCI outperforms 68.42% of its industry peers.
- SCI has a Debt/Equity ratio of 3.17. This is a high value indicating a heavy dependency on external financing.
- SCI has a worse Debt to Equity ratio (3.17) than 76.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.17 | ||
| Debt/FCF | 8.13 | ||
| Altman-Z | 0.82 |
ROIC/WACC0.58
WACC7.44%
2.3 Liquidity
- SCI has a Current Ratio of 0.56. This is a bad value and indicates that SCI is not financially healthy enough and could expect problems in meeting its short term obligations.
- SCI has a worse Current ratio (0.56) than 80.26% of its industry peers.
- A Quick Ratio of 0.52 indicates that SCI may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.52, SCI is doing worse than 80.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 10.88% 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 3.41% in the last year.
- The Revenue has been growing slightly by 5.32% on average over the past years.
EPS 1Y (TTM)10.88%
EPS 3Y-8.25%
EPS 5Y13.79%
EPS Q2Q%10.13%
Revenue 1Y (TTM)3.41%
Revenue growth 3Y0.35%
Revenue growth 5Y5.32%
Sales Q2Q%4.35%
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 10.16% on average per year.
- Based on estimates for the next years, SCI will show a small growth in Revenue. The Revenue will grow by 3.58% on average per year.
EPS Next Y10.2%
EPS Next 2Y10.34%
EPS Next 3Y10.16%
EPS Next 5YN/A
Revenue Next Year3.27%
Revenue Next 2Y3.39%
Revenue Next 3Y3.58%
Revenue Next 5YN/A
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 21.11 indicates a rather expensive valuation of SCI.
- SCI's Price/Earnings ratio is in line with the industry average.
- SCI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.60.
- A Price/Forward Earnings ratio of 18.52 indicates a rather expensive valuation of SCI.
- SCI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SCI is cheaper than 61.84% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. SCI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.11 | ||
| Fwd PE | 18.52 |
4.2 Price Multiples
- SCI's Enterprise Value to EBITDA ratio is in line with the industry average.
- Based on the Price/Free Cash Flow ratio, SCI is valued a bit cheaper than the industry average as 72.37% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.02 | ||
| EV/EBITDA | 11.98 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SCI does not grow enough to justify the current Price/Earnings ratio.
- SCI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.07
PEG (5Y)1.53
EPS Next 2Y10.34%
EPS Next 3Y10.16%
5. Dividend
5.1 Amount
- SCI has a Yearly Dividend Yield of 1.68%.
- SCI's Dividend Yield is rather good when compared to the industry average which is at 0.36. SCI pays more dividend than 90.79% of the companies in the same industry.
- SCI's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.68% |
5.2 History
- The dividend of SCI is nicely growing with an annual growth rate of 10.53%!
- SCI has been paying a dividend for at least 10 years, so it has a reliable track record.
- SCI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.53%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- SCI pays out 33.57% of its income as dividend. This is a sustainable payout ratio.
- The dividend of SCI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.57%
EPS Next 2Y10.34%
EPS Next 3Y10.16%
SERVICE CORP INTERNATIONAL / SCI FAQ
What is the ChartMill fundamental rating of SERVICE CORP INTERNATIONAL (SCI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to SCI.
Can you provide the valuation status for SERVICE CORP INTERNATIONAL?
ChartMill assigns a valuation rating of 4 / 10 to SERVICE CORP INTERNATIONAL (SCI). This can be considered as Fairly Valued.
How profitable is SERVICE CORP INTERNATIONAL (SCI) stock?
SERVICE CORP INTERNATIONAL (SCI) has a profitability rating of 7 / 10.
What is the expected EPS growth for SERVICE CORP INTERNATIONAL (SCI) stock?
The Earnings per Share (EPS) of SERVICE CORP INTERNATIONAL (SCI) is expected to grow by 10.2% in the next year.
How sustainable is the dividend of SERVICE CORP INTERNATIONAL (SCI) stock?
The dividend rating of SERVICE CORP INTERNATIONAL (SCI) is 7 / 10 and the dividend payout ratio is 33.57%.