SERVICE CORP INTERNATIONAL (SCI) Stock Fundamental Analysis
NYSE:SCI - New York Stock Exchange, Inc. - US8175651046 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to SCI. SCI was compared to 72 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 decent growth rate and is not valued too expensively. 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.
In the past 5 years SCI always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.06%, SCI is doing good in the industry, outperforming 60.56% of the companies in the same industry.
SCI has a Return On Equity of 32.11%. This is amongst the best in the industry. SCI outperforms 92.96% of its industry peers.
The Return On Invested Capital of SCI (4.45%) is better than 66.20% of its industry peers.
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 Profit Margin of 12.58%. This is amongst the best in the industry. SCI outperforms 80.28% of its industry peers.
In the last couple of years the Profit Margin of SCI has grown nicely.
SCI has a better Operating Margin (22.90%) than 92.96% of its industry peers.
SCI's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 26.28%, SCI is doing worse than 69.01% of the companies in the same industry.
SCI's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SCI is destroying value.
The number of shares outstanding for SCI has been reduced compared to 1 year ago.
SCI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SCI has an improved debt to assets ratio.
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 (0.88) which is in line with its industry peers.
SCI has a debt to FCF ratio of 7.44. This is a slightly negative value and a sign of low solvency as SCI would need 7.44 years to pay back of all of its debts.
SCI has a Debt to FCF ratio of 7.44. This is in the better half of the industry: SCI outperforms 64.79% of its industry peers.
A Debt/Equity ratio of 2.87 is on the high side and indicates that SCI has dependencies on debt financing.
SCI's Debt to Equity ratio of 2.87 is on the low side compared to the rest of the industry. SCI is outperformed by 74.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 7.44 | ||
| Altman-Z | 0.88 |
ROIC/WACC0.54
WACC8.21%
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.
SCI's Current ratio of 0.51 is on the low side compared to the rest of the industry. SCI is outperformed by 77.46% of its industry peers.
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
SCI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.96%.
Measured over the past years, SCI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.79% on average per year.
The Revenue has been growing slightly by 2.40% in the past 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.
Based on estimates for the next years, SCI will show a small growth in Revenue. The Revenue will grow by 3.54% on average per year.
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
The Price/Earnings ratio is 22.44, which indicates a rather expensive current valuation of SCI.
Based on the Price/Earnings ratio, SCI is valued a bit cheaper than 66.20% of the companies in the same industry.
SCI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.41.
A Price/Forward Earnings ratio of 19.16 indicates a rather expensive valuation of SCI.
Based on the Price/Forward Earnings ratio, SCI is valued a bit cheaper than 63.38% of the companies in the same industry.
SCI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.44 | ||
| Fwd PE | 19.16 |
4.2 Price Multiples
61.97% of the companies in the same industry are more expensive than SCI, based on the Enterprise Value to EBITDA ratio.
SCI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SCI is cheaper than 77.46% of the companies in the same industry.
| 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.
Compared to an average industry Dividend Yield of 3.87, SCI pays a better dividend. On top of this SCI pays more dividend than 90.14% of the companies listed 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
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 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 Change0.51%
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
WACC8.21%
ROIC/WACC0.54
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%