SERVICE CORP INTERNATIONAL (SCI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SCI - US8175651046 - Common Stock
81.18 USD
+0.18 (+0.22%)
81.18 USD
0 (0%)
Taking everything into account, SCI scores 5 out of 10 in our fundamental rating. SCI was compared to 76 industry peers in the Diversified Consumer Services industry. SCI scores excellent on profitability, but there are concerns on its financial health. SCI is not valued too expensively and it also shows a decent growth rate. 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.
- SCI had positive earnings in each of the past 5 years.
- Each year in the past 5 years SCI had a positive operating cash flow.
1.2 Ratios
- SCI has a Return On Assets (2.91%) which is in line with its industry peers.
- SCI's Return On Equity of 34.12% is amongst the best of the industry. SCI outperforms 89.47% of its industry peers.
- 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.
- SCI had an Average Return On Invested Capital over the past 3 years of 4.60%. This 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
- With a decent Profit Margin value of 12.46%, SCI is doing good in the industry, outperforming 73.68% of the companies in the same industry.
- SCI's Profit Margin has improved in the last couple of years.
- The Operating Margin of SCI (23.15%) is better than 88.16% of its industry peers.
- In the last couple of years the Operating Margin of SCI has grown nicely.
- 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.
- SCI's Gross Margin has improved in the last couple of years.
| 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.
- 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.
- SCI has a better debt/assets ratio than last year.
2.2 Solvency
- SCI has an Altman-Z score of 0.83. 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 0.83. This is comparable 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.
- The Debt to FCF ratio of SCI (8.13) is better than 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.
- With a Debt to Equity ratio value of 3.17, SCI is not doing good in the industry: 76.32% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.17 | ||
| Debt/FCF | 8.13 | ||
| Altman-Z | 0.83 |
ROIC/WACC0.57
WACC7.58%
2.3 Liquidity
- A Current Ratio of 0.56 indicates that SCI may have some problems paying its short term obligations.
- SCI has a worse Current ratio (0.56) than 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.
- SCI's Quick ratio of 0.52 is on the low side compared to the rest of the industry. SCI is outperformed by 80.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
- SCI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.88%, which is quite good.
- 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.
- SCI shows a small growth in Revenue. In the last year, the Revenue has grown by 3.41%.
- 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
- SCI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.08% yearly.
- The Revenue is expected to grow by 3.62% on average over the next years.
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.
- 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
- Based on the Price/Earnings ratio of 21.53, the valuation of SCI can be described as rather expensive.
- SCI's Price/Earnings ratio is in line with the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. SCI is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 18.94, the valuation of SCI can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, SCI is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
- SCI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.53 | ||
| Fwd PE | 18.94 |
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.
- 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 | 18.39 | ||
| EV/EBITDA | 12.1 |
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.
- The decent profitability rating of SCI may justify a higher PE ratio.
PEG (NY)2.1
PEG (5Y)1.56
EPS Next 2Y10.19%
EPS Next 3Y10.08%
5. Dividend
5.1 Amount
- SCI has a Yearly Dividend Yield of 1.66%. Purely for dividend investing, there may be better candidates out there.
- 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 | 1.66% |
5.2 History
- On average, the dividend of SCI grows each year by 10.53%, which is quite nice.
- SCI has been paying a dividend for at least 10 years, so it has 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 33.57% of its income as dividend. This is a 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%.