The Deathcare Dividend: Why SCI’s Shareholder Returns Are Outpacing Earnings

I’ve been tailing this one for months, and let me tell you, Service Corporation International (NYSE:SCI) is running a game that’s equal parts macabre and brilliant. As the mall mole of consumer economics, I’ve seen my fair share of retail graveyards, but SCI? They’re turning the inevitable into a goldmine. Here’s the dirt on why their shareholder returns are outpacing earnings—and why investors are digging it.

The Numbers Don’t Lie (But They Do Whisper)

First off, let’s talk about the elephant in the room—or rather, the hearse in the garage. SCI’s earnings per share (EPS) have been climbing at a steady 8-13% annual clip over the past five years. Solid, right? But here’s the kicker: total shareholder returns? A whopping 45% over the last year alone, and a mind-blowing 572% over the past decade. That’s not just outpacing the S&P 500; it’s lapping it like a Porsche at a funeral procession.

Now, why the disconnect? Well, dude, when you’re in the deathcare business, you’re not just selling caskets—you’re selling peace of mind. And peace of mind, as it turns out, is recession-proof. The market’s betting big on SCI’s future, and the numbers are backing it up. But let’s dig deeper—because nothing’s ever as simple as it seems.

The Deathcare Industry: A Grave Opportunity

1. Demographics Are Destiny

SCI’s bread and butter? An aging population. Baby Boomers are hitting their golden years, and let’s just say their mortality rates aren’t exactly trending downward. This isn’t a fad—it’s a demographic inevitability. And in an industry where demand is as predictable as death and taxes, SCI’s got a lock on the market.

2. Scale Matters (Especially When You’re Burying People)

SCI isn’t just big—they’re the biggest. With over 1,800 funeral homes and cemeteries under their belt, they’ve got economies of scale that smaller players can only dream of. That means lower costs, better pricing power, and a brand that’s synonymous with “final arrangements.” When you’re the go-to for grief, you don’t just survive—you thrive.

3. Innovation in the Afterlife

But here’s where it gets interesting. SCI isn’t resting on their laurels (pun intended). They’re expanding beyond traditional funeral services—think pre-need arrangements, digital memorials, and even eco-friendly burials. It’s like they’re saying, “Sure, we’ll handle your loved one’s final farewell, but how about we also make it Instagram-worthy?”

The Market’s Mixed Signals

Now, let’s talk about that pesky share price volatility. SCI’s stock took a 14% nosedive last quarter, and they’re not alone—Camtek and Zebra Technologies saw similar drops. But here’s the thing: short-term fluctuations don’t tell the whole story. The deathcare industry is stable, and SCI’s fundamentals are strong. That dip? Probably just investors taking a breather before the next leg up.

The Bottom Line

So, what’s the verdict? SCI’s shareholder returns are outpacing earnings because the market’s pricing in long-term growth, not just current profits. With an aging population, a dominant market position, and a knack for innovation, SCI’s got the recipe for sustained success. Sure, there’s some volatility in the short term, but over the long haul? They’re a safe bet—literally.

As for me? I’ll keep watching. Because in the world of consumer economics, nothing’s more fascinating than watching people spend money on the one thing they can’t avoid. And SCI? They’re making a killing off it.