The Funeral Business Is Booming (And Not Because Of COVID)
Today Service Corporation International, the largest for-profit funeral operator in North America, had its quarterly earnings call. SCI had another great quarter, you’ll be pleased to hear! So far in 2022 the company has made almost $500 million in profits - and its stock is up over 15% since last week's earnings report.
(Death is your best investment!)
SCI’s management seems fairly open with investors. For many years, much of the company’s growth came from buying family-run funeral homes as their operators, umm, died out. The underlying funeral business is slow growth and very predictable.
At least it used to be.
As Thomas L. Ryan, Service Corporation’s chairman and chief executive, told investors Wednesday morning:
So Service Corporation expected that once Covid passed, its business would go back to normal…
Only that’s not what has happened.
Covid is gone. But people keep dying. Why?
Unsurprisingly, Ryan did not mention mRNA vaccines anywhere. Why would he? Doing so would only make for headaches he and Service Corporation do not need.
But, earlier in the call, he did point to “more cancer deaths” and more broadly a decline in overall health:
Ryan also suggested delayed medical care might be an issue.
These explanations are… strained, at best. Aging demographics are hardly new, and the lockdowns that drove a “less healthy lifestyle” ended as early as mid-2020 in most red states and by early 2021 almost everywhere. Opioids and overdoses generally remain a horrendous crisis, but deaths appear to have peaked in early 2022 and fallen slightly since. And for all the discussion of delays in medical care, hospitals and doctors offices have functioned essentially normally for at least 18 months.
In any case, the United States is hardly alone in seeing a large and so far unexplained spike in deaths in 2022.
Countries from Germany to Australia to Taiwan are seeing similar trends.
They all have something in common. No points for guessing what.
In any case, Service Corporation is expecting business to stay good for years to come.
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[ZH: It is not just funeral services companies. Market participants were somewhat stunned when Lincoln Financial announced results last week and shares collapsed over 30% after a shocking, and unexpected, $2.6 billion Q3 loss.
“A Catastrophe (and Not the Natural Kind),” Wells Fargo Securities analysts said in a note to clients Wednesday night, following the after-market release of earnings by the Pennsylvania life-insurance and annuities company.
What drove the big loss?
So, we wonder, is that the post-vaxx-new-normal-world-order trade: Short Life Insurers, Long Funeral Service Providers?]
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