Critical Contrast: StoneMor Partners (STON) versus Service Co. International (SCI)

Service Co. International (NYSE: SCI) and StoneMor Partners (NYSE:STON) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Analyst Ratings

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This is a summary of recent recommendations and price targets for Service Co. International and StoneMor Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Service Co. International 1 0 4 0 2.60
StoneMor Partners 0 4 0 0 2.00

Service Co. International presently has a consensus price target of $44.50, suggesting a potential upside of 15.26%. StoneMor Partners has a consensus price target of $7.00, suggesting a potential upside of 12.90%. Given Service Co. International’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Service Co. International is more favorable than StoneMor Partners.

Institutional and Insider Ownership

87.0% of Service Co. International shares are held by institutional investors. Comparatively, 41.6% of StoneMor Partners shares are held by institutional investors. 6.2% of Service Co. International shares are held by company insiders. Comparatively, 9.8% of StoneMor Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Service Co. International has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, StoneMor Partners has a beta of 0.02, meaning that its share price is 98% less volatile than the S&P 500.

Valuation & Earnings

This table compares Service Co. International and StoneMor Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Service Co. International $3.10 billion 2.31 $546.66 million $1.55 24.91
StoneMor Partners $326.23 million 0.72 -$32.49 million N/A N/A

Service Co. International has higher revenue and earnings than StoneMor Partners.

Profitability

This table compares Service Co. International and StoneMor Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Service Co. International 17.66% 23.68% 2.38%
StoneMor Partners -10.42% -22.16% -1.98%

Dividends

Service Co. International pays an annual dividend of $0.68 per share and has a dividend yield of 1.8%. StoneMor Partners pays an annual dividend of $0.33 per share and has a dividend yield of 5.3%. Service Co. International pays out 43.9% of its earnings in the form of a dividend. Service Co. International has increased its dividend for 6 consecutive years.

Summary

Service Co. International beats StoneMor Partners on 12 of the 15 factors compared between the two stocks.

Service Co. International Company Profile

Service Corporation International provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments. Its funeral service and cemetery operations comprise funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other businesses. The company also provides professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles; arranging and directing services; and removal, preparation, embalming, cremation, memorialization, and travel protection, as well as catering services. In addition, it offers funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, on-line and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise. Further, the company's cemeteries provide cemetery property interment rights, including developed lots, lawn crypts, mausoleum spaces, niches, and other cremation memorialization and interment options; and sells cemetery merchandise and services, including memorial markers and bases, outer burial containers, flowers and floral placements, graveside services, merchandise installations, and interments, as well as offers preneed cemetery merchandise and services. Service Corporation International offers its products and services under the Dignity Memorial, Dignity Planning, National Cremation Society, Advantage Funeral and Cremation Services, Funeraria del Angel, Making Everlasting Memories, Neptune Society, and Trident Society brands. As of December 31, 2017, it owned and operated 1,488 funeral service locations; and 473 cemeteries, including 281 funeral service/cemetery combination locations covering 45 states, 8 Canadian provinces, the District of Columbia, and Puerto Rico. The company was founded in 1962 and is headquartered in Houston, Texas.

StoneMor Partners Company Profile

StoneMor Partners L.P., together with its subsidiaries, owns and operates cemeteries and funeral homes in the United States. It operates through two segments, Cemetery Operations and Funeral Home Operations. The company's cemetery products and services include interment rights, such as burial lots, lawn crypts, mausoleum crypts, cremation niches, and perpetual care rights; merchandise comprising burial vaults, caskets, grave markers and grave marker bases, and memorials; and installation services for burial vaults, caskets, and other cemetery merchandise, as well as other service items. It also provides receptacles for cremated remains that include urns, and the inurnment of cremated remains in niches or scattering gardens; and funeral home services, such as family consultation, the removal and preparation of remains, and the use of funeral home facilities for visitation and prayer services. As of September 15, 2017, the company owned and operated 316 cemeteries in 27 states and Puerto Rico; and 98 funeral homes in 18 states and Puerto Rico. StoneMor GP LLC serves as the general partner of StoneMor Partners L.P. The company was founded in 1999 and is headquartered in Trevose, Pennsylvania.

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