Latest news with #ServiceCorporationInternational
Yahoo
13 hours ago
- Business
- Yahoo
Calculating The Intrinsic Value Of Service Corporation International (NYSE:SCI)
Using the 2 Stage Free Cash Flow to Equity, Service Corporation International fair value estimate is US$71.56 With US$78.48 share price, Service Corporation International appears to be trading close to its estimated fair value The US$88.88 analyst price target for SCI is 24% more than our estimate of fair value In this article we are going to estimate the intrinsic value of Service Corporation International (NYSE:SCI) by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$485.6m US$527.2m US$558.2m US$548.5m US$546.7m US$550.3m US$557.7m US$567.8m US$580.1m US$594.0m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -1.72% Est @ -0.33% Est @ 0.65% Est @ 1.34% Est @ 1.82% Est @ 2.16% Est @ 2.39% Present Value ($, Millions) Discounted @ 7.5% US$452 US$456 US$449 US$410 US$380 US$356 US$335 US$318 US$302 US$287 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$3.7b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.5%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$594m× (1 + 2.9%) ÷ (7.5%– 2.9%) = US$13b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$13b÷ ( 1 + 7.5%)10= US$6.4b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$10b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of US$78.5, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Service Corporation International as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.5%, which is based on a levered beta of 1.060. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Service Corporation International Strength Earnings growth over the past year exceeded its 5-year average. Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Weakness Earnings growth over the past year underperformed the Consumer Services industry. Dividend is low compared to the top 25% of dividend payers in the Consumer Services market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio compared to estimated Fair P/E ratio. Threat Annual earnings are forecast to grow slower than the American market. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Service Corporation International, we've compiled three additional elements you should look at: Risks: You should be aware of the 2 warning signs for Service Corporation International we've uncovered before considering an investment in the company. Future Earnings: How does SCI's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
14-05-2025
- Business
- Yahoo
Concerns Surrounding Service Corporation International's (NYSE:SCI) Performance
The stock price didn't jump after Service Corporation International (NYSE:SCI) posted decent earnings last week. Our analysis showed that there are some concerning factors in the earnings that investors may be cautious of. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Importantly, our data indicates that Service Corporation International's profit received a boost of US$328m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Service Corporation International had a rather significant contribution from unusual items relative to its profit to March 2025. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As previously mentioned, Service Corporation International's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that Service Corporation International's underlying earnings power is lower than its statutory profit. The good news is that its earnings per share increased slightly in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of Service Corporation International. This note has only looked at a single factor that sheds light on the nature of Service Corporation International's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
06-05-2025
- Business
- Yahoo
Service Corporation International First Quarter 2025 Earnings: Beats Expectations
Service Corporation International (NYSE:SCI) First Quarter 2025 Results Key Financial Results Revenue: US$1.07b (up 2.8% from 1Q 2024). Net income: US$142.9m (up 8.8% from 1Q 2024). Profit margin: 13% (in line with 1Q 2024). EPS: US$0.99 (up from US$0.90 in 1Q 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. NYSE:SCI Earnings and Revenue Growth May 6th 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period Service Corporation International Revenues and Earnings Beat Expectations Revenue exceeded analyst estimates by 1.2%. Earnings per share (EPS) also surpassed analyst estimates by 8.1%. Looking ahead, revenue is forecast to grow 3.3% p.a. on average during the next 3 years, compared to a 11% growth forecast for the Consumer Services industry in the US. Performance of the American Consumer Services industry. The company's shares are down 5.7% from a week ago. Risk Analysis You should learn about the 2 warning signs we've spotted with Service Corporation International. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
09-03-2025
- Business
- Yahoo
Service Corporation International (NYSE:SCI) Looks Interesting, And It's About To Pay A Dividend
Service Corporation International (NYSE:SCI) stock is about to trade ex-dividend in 4 days. Typically, the ex-dividend date is one business day before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Service Corporation International's shares on or after the 14th of March will not receive the dividend, which will be paid on the 31st of March. The company's upcoming dividend is US$0.32 a share, following on from the last 12 months, when the company distributed a total of US$1.20 per share to shareholders. Calculating the last year's worth of payments shows that Service Corporation International has a trailing yield of 1.5% on the current share price of US$80.86. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Service Corporation International can afford its dividend, and if the dividend could grow. View our latest analysis for Service Corporation International Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Service Corporation International paid out a comfortable 34% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 31% of its free cash flow as dividends, a comfortable payout level for most companies. It's positive to see that Service Corporation International's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Service Corporation International's earnings per share have been growing at 12% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Service Corporation International has delivered 14% dividend growth per year on average over the past 10 years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it. Should investors buy Service Corporation International for the upcoming dividend? Service Corporation International has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. It's a promising combination that should mark this company worthy of closer attention. With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 1 warning sign for Service Corporation International that you should be aware of before investing in their shares. Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
14-02-2025
- Business
- Yahoo
Service Corporation International Full Year 2024 Earnings: In Line With Expectations
Revenue: US$4.19b (up 2.1% from FY 2023). Net income: US$518.6m (down 3.5% from FY 2023). Profit margin: 12% (in line with FY 2023). EPS: US$3.57. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) was also in line with analyst expectations. The primary driver behind last 12 months revenue was the Funeral segment contributing a total revenue of US$2.32b (56% of total revenue). Notably, cost of sales worth US$3.10b amounted to 74% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling US$433.0m were related to Non-Operating costs. This indicates that a significant portion of the company's costs is related to non-core activities. Explore how SCI's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 3.2% p.a. on average during the next 2 years, compared to a 10% growth forecast for the Consumer Services industry in the US. Performance of the American Consumer Services industry. The company's shares are up 6.0% from a week ago. You should always think about risks. Case in point, we've spotted 1 warning sign for Service Corporation International you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
