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Carriage Services - The Stable Growth Stock You Need

Integer Investments profile picture
Integer Investments


  • Carriage Services provides death-care products and services in the United States.
  • The company’s Q1 2017 results have demonstrated strong growth, with sales growing by 7.6% compared to Q1 2016.
  • Here we discuss the robust qualitative factors that are driving Carriage Services' growth, before providing a valuation on the business.

This post was written by Hamish Kumar, Integer Investments analyst.

Investment Thesis

Carriage Services' (NYSE:CSV) recent earnings release emphasizes the company’s strong qualitative factors and earnings power. With a strong industry outlook for death-care goods and services, we believe that the company warrants a "hold" recommendation.

What Does It Do?

Carriage Services is a provider of death-care products and services in the United States. The company operates through both funeral home and cemetery segments. The funeral home segment includes but is not limited to offering burial, cremation, consultation, and transportation services. The cemetery segment provides products and services such as the right to interment in cemetery sites. Additionally, Carriage Services offers death-care related merchandise, including urns, burial caskets and cremation memorialization products. As of December 31, 2016, the company operated 170 funeral homes in 28 states, and 32 cemeteries in 11 states.

Recent Performance

Carriage Services' Q1 2017 earnings were reported on April 26th. The company has had another strong quarter, with revenue increasing 7.6% and operating income increasing 36.1% compared to prior year results. This was driven by a combination of comparable funeral segment revenue growth and corporate expense savings. Funeral service revenues were primarily driven through acquisitions, whereas corporate expenses saving gains were attributed to unusually high comparable costs in 2016. A summary of the results is presented below:

Competitive Advantage

Carriage Services has two competitive advantages.

1) Although Carriage Services doesn’t have a particularly large market share (estimated 1-2%), the majority of death-care providers are locally owned and independent. The company is therefore larger than the majority of competitors. This larger size has meant that CSV has considerably driven overhead costs down through economies of scale. This has resulted in greater cash flows and the ability to further grow through acquisitions.

2) Carriage Services has the ability to

This article was written by

Integer Investments profile picture
At Integer Investments we focus on US and European equities with a value/GARP strategy. Most articles are written by our portfolio manager Cristiano Bellavitis, Ph.D. Articles written by our analysts will be signed at the top. To view the profile of our analysts please visit our website.Cristiano is also an Assistant Professor at the Whitman School of Management, Syracuse University (United States). He earned a Ph.D. from Cass Business School, City University of London. He applies academic rigour to our investment strategy. If you want us to follow certain stocks or if you are interested to learn more about Integer Investments feel free to get in touch.(www.integerinvestments.com)

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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