You can't take any investments when you die. If this is the case for everyone, you might want to benefit from funeral investments while you are still living and breathing.
Cemeteries and funeral homes are mostly affairs that your parents take care of. However, there is a growing public "consolidator" that owns at least a slice of the funeral stocks.
The industry leader of the so-called "death care" market in North America is a company called Service Corporation International. The company's SCI is 0.43% and owns around 16% of shares in the Northern region at present. If you combined all other consolidators, there is only a total 5% which leads to how the market dictates the value of the shares. If you have invested $10,000 5 years ago, it would be worth $28,000 today. This is including dividends.
The stock yields 1.7% annually including capital spending and buybacks.
StoneMor Partners which is the death care industry's dividend experts tells a different story. The company's STON is -1.47% and it already has paid out 1.4x to its shareholders in just 5 years. Their structure is limited partners but it did not help with the unit shares. If you have invested $10,000 in their company 5 years ago, it will be worth $4,115 today. This is just about 1/7 of the equivalent investment in the other company which is SCI.
StoneMor used much of their cash in cemetery plots. It prioritizes cash from sales and debts to buy the plots instead of distributing the profits to the unitholders.
However, most of us know that cemeteries take a long time before you can get your investment back. The industry rules deemed that the cash needs to be put in a trust before the capital can grow. The company has replaced its entire top managers, half other shareholders disappeared, the distribution that was set quarterly was temporarily suspended, and each unit hit its all-time lowest value.
Deathcare is unpredictable. Everyone is not going to die today and you have to wait long. Demography is also a factor in death care. Only 8 deaths are recorded for every 1,000 Americans in the last 10 years. The rise of baby boomers has pushed the numbers and there are about 2.7 million deaths recorded in 2017 alone. By 20140, it is expected that the death rate will significantly rise.
For funeral directors, a lot of factors affect the investment including people who prefer cremation. There is a prediction by the National Funeral Directors Association that the cremation rate will rise to more than 70% in the year 2030.
The SCI is currently the best company to invest when you prefer death care. Their total return compared from 17 years ago was 500%. The premium is computed at nearly 30% in the past decade.
StoneMor is currently at 22% even after the dividends are halved. However, you will not likely receive any token dividends in a long time. However, they can boost their revenues from selling the cemeteries that they bought.
If you are patient, you will still gain a lot and make a killing out of death care. Funeral Homes Miami