Reviewing Hillenbrand (HI) & Carriage Services (CSV)

Hillenbrand (NYSE: HI) and Carriage Services (NYSE:CSV) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

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This is a breakdown of current ratings and price targets for Hillenbrand and Carriage Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hillenbrand 0 1 2 0 2.67
Carriage Services 0 1 1 0 2.50

Hillenbrand currently has a consensus price target of $53.00, suggesting a potential upside of 15.47%. Carriage Services has a consensus price target of $57.00, suggesting a potential upside of 106.07%. Given Carriage Services’ higher probable upside, analysts clearly believe Carriage Services is more favorable than Hillenbrand.

Dividends

Hillenbrand pays an annual dividend of $0.83 per share and has a dividend yield of 1.8%. Carriage Services pays an annual dividend of $0.30 per share and has a dividend yield of 1.1%. Hillenbrand pays out 39.3% of its earnings in the form of a dividend. Carriage Services pays out 21.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hillenbrand has increased its dividend for 10 consecutive years and Carriage Services has increased its dividend for 2 consecutive years. Hillenbrand is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Hillenbrand and Carriage Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hillenbrand 7.52% 19.51% 7.29%
Carriage Services 14.41% 13.27% 2.77%

Insider and Institutional Ownership

78.1% of Hillenbrand shares are held by institutional investors. Comparatively, 88.0% of Carriage Services shares are held by institutional investors. 1.8% of Hillenbrand shares are held by insiders. Comparatively, 13.4% of Carriage Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Hillenbrand has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Carriage Services has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Earnings and Valuation

This table compares Hillenbrand and Carriage Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hillenbrand $1.59 billion 1.82 $126.20 million $2.11 21.75
Carriage Services $258.14 million 1.73 $37.19 million $1.39 19.90

Hillenbrand has higher revenue and earnings than Carriage Services. Carriage Services is trading at a lower price-to-earnings ratio than Hillenbrand, indicating that it is currently the more affordable of the two stocks.

Summary

Hillenbrand beats Carriage Services on 12 of the 17 factors compared between the two stocks.

About Hillenbrand

Hillenbrand, Inc. is a diversified industrial company with multiple brands that serve a range of industries across the globe. The Company operates in two segments: the Process Equipment Group and Batesville. The Process Equipment Group businesses design, develop, manufacture and service engineered industrial equipment throughout the world. The Process Equipment Group segment is a provider of compounding, extrusion and material handling; size reduction; screening and separating, and flow control products and services for a range of manufacturing and other industrial processes. It offers equipment for industries, including plastics, chemicals, fertilizers and mining. Its Batesville segment operates in the North American death care industry, and manufactures and sells funeral service products, including burial caskets, cremation caskets, containers and urns, selection room display fixtures, other personalization and memorialization products, and Web-based technology applications.

About Carriage Services

Carriage Services, Inc. is a provider of death care services and merchandise in the United States. The Company operates in two business segments: Funeral Home Operations and Cemetery Operations. The Funeral Homes segment provides funeral services (traditional burial and cremation) and sells related merchandise, such as caskets and urns. Its cemetery products and services include interment services, the rights to interment in cemetery sites and related cemetery merchandise, such as memorials and vaults. It serves suburban and rural markets. It provides funeral and cemetery services and products on both at-need (time of death) and preneed (planned prior to death) basis. It also maintains trusts in connection with funeral home and cemetery operations, including preneed funeral trusts, preneed cemetery merchandise and service trusts and cemetery perpetual care trusts. The Company operates 174 funeral homes in 29 states and 32 cemeteries in 11 states.

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