Death Stocks: Prospering From the Aging American Population

Last week, a friend of mine died of a heart attack. Another friend has malignant lymphoma. I keep hearing about friends and acquaintances in their forties, fifties, and sixties (which I consider to be relatively young ages), either dying or getting some terrible disease, such as Parkinson’s or cancer. Although it’s sad and depressing, we have to accept the fact that death is a fact of life.

With the baby boom getting older, the demand for products and services from ‘death stocks’ is practically guaranteed to increase.

These are a few stocks that may prosper from the aging of the American population:

Matthews International Corp. (MATW) manufactures and markets cast bronze memorials, wood and metal caskets, cremation equipment, and other related products. It has a P/E of 19.5 and a price sales ratio of 1.8. Last Friday, it announced a 2.5 million buyback. It pays a small yield of .6%.

Hillenbrand Industries Inc. (HB), which is based in Batesville, Indiana has a subsidiary in the funeral service business, which makes and markets caskets, cremation containers and urns. It also has other divisions in the medical technologies and health care industry. The P/E is 16.7 and the P/S is 1.9 and the PEG is 1.9. Its yield is 1.9%.

The Houston, Texas based company, Service Corp. International (SCI) owns funeral homes, cemeteries, and crematoriums in the United States, Canada and Germany. It has a fairly high P/E of 63, a P/S of 2, and a PEG of 2.5. Dividends are providing a yield of about 1%.

Another Houston based company Carriage Services Inc. (CSV) is also in the casket, funeral, and cremation business. Earnings have been negative but forward P/E is 17.7. Price sales is 1 and PEG is 1.9. Its earnings announcement will be on May 2.

Stewart Enterprises Inc. (STEI) is another company, based in Louisiana, that owns funeral homes and cemeteries. Its P/E is 20.3, P/S is 1.5, and PEG is 3. It pays a yield of 1.3%.

A Pennsylvania company, Stonemor Partners LP (STON), specializes in the ownership and operation of cemeteries. It has a very high yield of 76, and an extremely high PEG of 43. However, the stock does have a yield of 7.75 and is structured as a limited partnership.

Disclosure: The author does not own any of the above.