Zacks Investment Research Downgrades Service Co. International (SCI) to Sell

Zacks Investment Research lowered shares of Service Co. International (NYSE:SCI) from a hold rating to a sell rating in a research note issued to investors on Wednesday.

According to Zacks, “While Service Corporation has outpaced the industry in a year, the trend may reverse. After delivering beats in seven straight quarters, Service Corporation marked its first earnings miss in third-quarter 2018. Though earnings rose year over year, it was hit by high general and administrative costs, and high interest costs. Persistence of these factors is likely to keep earnings under pressure. Also, consumers’ rising inclination toward cremations over traditional burials is a threat as cremations generate lower revenues. Use of alternative channels to buy funeral related products also poses concerns. Nonetheless, the company continued to witness enhanced revenues, courtesy of greater funeral and cemetery revenues. Management expects the strong performance to continue in the fourth quarter. It is focused on driving revenues, utilizing scale and allocating capital efficiently. These factors and solid prospects from Baby Boomers bode well.”

Other research analysts also recently issued research reports about the stock. ValuEngine raised shares of Service Co. International from a hold rating to a buy rating in a research note on Monday, September 17th. Oppenheimer lifted their price target on Service Co. International from $42.00 to $47.00 and gave the company an outperform rating in a report on Friday, October 26th. Credit Suisse Group lifted their price target on Service Co. International from $46.00 to $50.00 and gave the company an outperform rating in a report on Monday, September 17th. Finally, Raymond James lifted their price target on Service Co. International from $45.00 to $47.00 and gave the company a strong-buy rating in a report on Wednesday, October 31st. One investment analyst has rated the stock with a sell rating, five have given a buy rating and one has issued a strong buy rating to the company. Service Co. International currently has an average rating of Buy and an average target price of $46.17.

Shares of SCI stock opened at $43.11 on Wednesday. Service Co. International has a twelve month low of $35.19 and a twelve month high of $47.09. The stock has a market capitalization of $7.99 billion, a P/E ratio of 27.81, a PEG ratio of 1.99 and a beta of 1.06. The company has a debt-to-equity ratio of 2.38, a current ratio of 0.54 and a quick ratio of 0.49.

Service Co. International (NYSE:SCI) last announced its earnings results on Monday, October 29th. The company reported $0.35 earnings per share for the quarter, missing the consensus estimate of $0.36 by ($0.01). Service Co. International had a net margin of 15.76% and a return on equity of 22.47%. The firm had revenue of $778.80 million during the quarter, compared to analyst estimates of $762.60 million. During the same period in the previous year, the firm posted $0.33 EPS. The company’s revenue for the quarter was up 6.5% compared to the same quarter last year. On average, analysts expect that Service Co. International will post 1.82 EPS for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Monday, December 31st. Shareholders of record on Friday, December 14th will be issued a $0.17 dividend. This represents a $0.68 annualized dividend and a yield of 1.58%. The ex-dividend date is Thursday, December 13th. Service Co. International’s dividend payout ratio (DPR) is 43.87%.

In other Service Co. International news, CEO Thomas L. Ryan sold 50,000 shares of Service Co. International stock in a transaction dated Thursday, November 8th. The stock was sold at an average price of $44.86, for a total value of $2,243,000.00. Following the completion of the sale, the chief executive officer now owns 976,138 shares in the company, valued at approximately $43,789,550.68. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Thomas L. Ryan sold 99,597 shares of Service Co. International stock in a transaction dated Thursday, November 15th. The shares were sold at an average price of $44.14, for a total value of $4,396,211.58. Following the completion of the sale, the chief executive officer now owns 1,075,735 shares of the company’s stock, valued at approximately $47,482,942.90. The disclosure for this sale can be found here. Insiders sold a total of 314,400 shares of company stock valued at $14,012,985 in the last 90 days. 6.60% of the stock is owned by company insiders.

Institutional investors and hedge funds have recently bought and sold shares of the business. Honkamp Krueger Financial Services Inc. purchased a new stake in Service Co. International in the 3rd quarter valued at about $107,000. TRUE Private Wealth Advisors purchased a new stake in shares of Service Co. International during the 3rd quarter worth about $125,000. Fort L.P. purchased a new stake in shares of Service Co. International during the 2nd quarter worth about $120,000. Steward Partners Investment Advisory LLC grew its holdings in shares of Service Co. International by 707.3% during the 3rd quarter. Steward Partners Investment Advisory LLC now owns 3,423 shares of the company’s stock worth $151,000 after purchasing an additional 2,999 shares during the period. Finally, Townsend & Associates Inc purchased a new stake in shares of Service Co. International during the 3rd quarter worth about $164,000. Institutional investors own 87.15% of the company’s stock.

About Service Co. International

Service Corporation International provides deathcare products and services in the United States and Canada. The company operates through Funeral and Cemetery segments. Its funeral service and cemetery operations comprise funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other businesses.

Further Reading: What Factors Can Affect Return on Equity?

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