SERVICE CORP INTERNATIONAL (SCI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SCI - US8175651046 - Common Stock
81 USD
-0.71 (-0.87%)
81 USD
0 (0%)
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. 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
- In the past year SCI was profitable.
- SCI had a positive operating cash flow in the past year.
- Each year in the past 5 years SCI has been profitable.
- SCI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a Return On Assets value of 2.91%, SCI perfoms like the industry average, outperforming 56.58% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 34.12%, SCI belongs to the top of the industry, outperforming 89.47% of the companies in the same industry.
- SCI's Return On Invested Capital of 4.31% is fine compared to the rest 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
- The Profit Margin of SCI (12.46%) is better than 73.68% of its industry peers.
- In the last couple of years the Profit Margin of SCI has grown nicely.
- SCI has a Operating Margin of 23.15%. This is amongst the best in the industry. SCI outperforms 88.16% of its industry peers.
- SCI's Operating Margin has improved in the last couple of years.
- SCI's Gross Margin of 26.44% is on the low side compared to the rest of the industry. SCI is outperformed by 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
- SCI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, SCI has less shares outstanding
- Compared to 5 years ago, SCI has less shares outstanding
- Compared to 1 year ago, SCI has an improved debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 0.83, we must say that SCI is in the distress zone and has some risk of bankruptcy.
- SCI's Altman-Z score of 0.83 is in line compared to the rest of the industry. SCI outperforms 47.37% 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.
- A Debt/Equity ratio of 3.17 is on the high side and indicates that SCI has dependencies on debt financing.
- The Debt to Equity ratio of SCI (3.17) is worse than 76.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.17 | ||
| Debt/FCF | 8.13 | ||
| Altman-Z | 0.83 |
ROIC/WACC0.57
WACC7.56%
2.3 Liquidity
- A Current Ratio of 0.56 indicates that SCI may have some problems paying its short term obligations.
- SCI has a Current ratio of 0.56. This is amonst the worse of the industry: SCI underperforms 80.26% of its industry peers.
- SCI has a Quick 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.
- The Quick ratio of SCI (0.52) is worse than 80.26% of its industry peers.
| 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.
- The Revenue has been growing slightly by 3.41% in the past year.
- Measured over the past years, SCI shows a small growth in Revenue. The Revenue has been growing by 5.32% on average per year.
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
- The Earnings Per Share is expected to grow by 10.08% on average over the next years. This is quite good.
- SCI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.62% yearly.
EPS Next Y10.27%
EPS Next 2Y10.19%
EPS Next 3Y10.08%
EPS Next 5YN/A
Revenue Next Year3.27%
Revenue Next 2Y3.37%
Revenue Next 3Y3.62%
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.
- 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 21.49.
- SCI's Price/Earnings ratio is in line with the industry average.
- The average S&P500 Price/Earnings ratio is at 27.32. SCI is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 18.90 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 63.16% of the companies in the same industry.
- SCI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.49 | ||
| Fwd PE | 18.9 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SCI indicates a somewhat cheap valuation: SCI is cheaper than 60.53% of the companies listed in the same industry.
- SCI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SCI is cheaper than 72.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.35 | ||
| EV/EBITDA | 12.1 |
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)2.09
PEG (5Y)1.56
EPS Next 2Y10.19%
EPS Next 3Y10.08%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.66%, SCI has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.36, SCI pays a better dividend. On top of this SCI pays more dividend than 90.79% of the companies listed in the same industry.
- SCI's Dividend Yield is comparable with the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
5.2 History
- The dividend of SCI is nicely growing with an annual growth rate of 10.53%!
- SCI has paid a dividend for at least 10 years, which is 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
- 33.57% of the earnings are spent on dividend by SCI. This is a low number and sustainable payout ratio.
- SCI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.57%
EPS Next 2Y10.19%
EPS Next 3Y10.08%
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 10.27% 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%.