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 73 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. Finally 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
The Return On Assets of SCI (3.06%) is better than 67.12% of its industry peers.
SCI has a better Return On Equity (32.11%) than 93.15% of its industry peers.
SCI has a Return On Invested Capital of 4.45%. This is in the better half of the industry: SCI outperforms 67.12% 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 12.00%.
| 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
Looking at the Profit Margin, with a value of 12.58%, SCI belongs to the top of the industry, outperforming 84.93% of the companies in the same industry.
In the last couple of years the Profit Margin of SCI has grown nicely.
Looking at the Operating Margin, with a value of 22.90%, SCI belongs to the top of the industry, outperforming 93.15% of the companies in the same industry.
In the last couple of years the Operating Margin of SCI has grown nicely.
The Gross Margin of SCI (26.28%) is worse than 68.49% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SCI is destroying value.
Compared to 1 year ago, SCI has less shares outstanding
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 0.87. This is a bad value and indicates that SCI is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.87, SCI is in line with its industry, outperforming 49.32% of the companies in the same industry.
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 has a Debt to FCF ratio of 7.44. This is in the better half of the industry: SCI outperforms 67.12% 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.
Looking at the Debt to Equity ratio, with a value of 2.87, SCI is doing worse than 72.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.87 | ||
| Debt/FCF | 7.44 | ||
| Altman-Z | 0.87 |
ROIC/WACC0.58
WACC7.71%
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.
The Current ratio of SCI (0.51) is worse than 76.71% of its industry peers.
A Quick Ratio of 0.46 indicates that SCI may have some problems paying its short term obligations.
SCI has a worse Quick ratio (0.46) than 76.71% 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%.
SCI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.79% yearly.
SCI shows a small growth in Revenue. In the last year, the Revenue has grown by 2.40%.
The Revenue has been growing slightly by 5.32% on average over the past years.
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 3.46% on average per year.
EPS Next Y8.27%
EPS Next 2Y9.28%
EPS Next 3Y11%
EPS Next 5YN/A
Revenue Next Year2.58%
Revenue Next 2Y3%
Revenue Next 3Y3.46%
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 21.28 indicates a rather expensive valuation of SCI.
SCI's Price/Earnings ratio is a bit cheaper when compared to the industry. SCI is cheaper than 68.49% of the companies in the same industry.
When comparing the Price/Earnings ratio of SCI to the average of the S&P500 Index (25.91), we can say SCI is valued inline with the index average.
With a Price/Forward Earnings ratio of 18.17, SCI is valued on the expensive side.
Based on the Price/Forward Earnings ratio, SCI is valued a bit cheaper than the industry average as 68.49% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.85, SCI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 18.17 |
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 67.12% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, SCI is valued a bit cheaper than 76.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.02 | ||
| EV/EBITDA | 12.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of SCI may justify a higher PE ratio.
PEG (NY)2.57
PEG (5Y)1.54
EPS Next 2Y9.28%
EPS Next 3Y11%
5. Dividend
5.1 Amount
SCI has a Yearly Dividend Yield of 1.66%.
SCI's Dividend Yield is rather good when compared to the industry average which is at 4.54. SCI pays more dividend than 90.41% of the companies in the same industry.
SCI's Dividend Yield is slightly below the S&P500 average, which is at 2.36.
| 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 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
33.26% of the earnings are spent on dividend by SCI. This is a low number and 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%
76.59
-0.86 (-1.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners95.44%
Inst Owner Change-4.99%
Ins Owners2.66%
Ins Owner Change0.58%
Market Cap11.04B
Analysts84
Price Target90.5 (18.16%)
Short Float %4.21%
Short Ratio4.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
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)0.76%
PT rev (3m)0.19%
EPS NQ rev (1m)-5.57%
EPS NQ rev (3m)-7.02%
EPS NY rev (1m)-1.15%
EPS NY rev (3m)-3.72%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-1.12%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.28 | ||
| Fwd PE | 18.17 | ||
| P/S | 2.62 | ||
| P/FCF | 17.02 | ||
| P/OCF | 10.65 | ||
| P/B | 6.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.05 |
EPS(TTM)3.6
EY4.7%
EPS(NY)4.22
Fwd EY5.5%
FCF(TTM)4.5
FCFY5.88%
OCF(TTM)7.19
OCFY9.39%
SpS29.25
BVpS11.46
TBVpS-3.02
PEG (NY)2.57
PEG (5Y)1.54
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 | 0.87 |
F-Score6
WACC7.71%
ROIC/WACC0.58
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 Year2.58%
Revenue Next 2Y3%
Revenue Next 3Y3.46%
Revenue Next 5YN/A
EBIT growth 1Y4.67%
EBIT growth 3Y-6.53%
EBIT growth 5Y8.47%
EBIT Next Year43.52%
EBIT Next 3Y16.16%
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%