Company Overview
Carriage Services, Inc. operates within the consumer cyclical sector, specifically focusing on the personal services industry where it delivers funeral and cemetery services alongside merchandise throughout the United States. The company executes its business model through two primary operational segments: Funeral Home Operations and Cemetery Operations. The Funeral Home Operations segment provides consultation services and maintains facilities for visitation and memorials, while the Cemetery Operations segment manages land and burial services. The company demonstrates a significant market presence with a market capitalization of $702.82M and an annual revenue of $417.44M, supported by a workforce of 1248 employees. These financial figures indicate that Carriage Services, Inc. is a mid-to-large cap entity with substantial revenue generation capabilities within a niche market that typically offers stable cash flows due to the essential nature of its services.
Financial Health
The company generated $417.44M in revenue over the trailing twelve months, resulting in a net income of $50.82M and an EBITDA of $121.74M. The substantial gap between the $417.44M in revenue and the $50.82M in net income reveals a cost structure where operating expenses and depreciation significantly impact bottom-line profitability, though the EBITDA figure suggests strong operational cash generation before capital expenditures. Free cash flow stands at $44.98M, which indicates that the company retains a positive amount of cash after funding its operations and capital expenditures, providing a degree of financial flexibility for debt servicing or potential future investments. However, the balance sheet is heavily leveraged, evidenced by a debt load of $552.51M against a cash position of only $1.69M, resulting in a debt-to-equity ratio of 216.86. Despite this high leverage, the current ratio is recorded at 0.98, suggesting that the company's current assets slightly fall short of covering its current liabilities, which may present short-term liquidity challenges depending on the timing of cash flows. Management effectiveness is highlighted by a return on equity of 22.2%, which signifies efficient generation of profits from shareholders' equity, while the return on assets stands at 4.7%, reflecting the capital intensity of the funeral services business model.
Valuation Assessment
Valuation metrics for Carriage Services, Inc. show a trailing P/E ratio of 13.73 compared to a forward P/E of 11.96, implying that the market expects earnings growth in the future that will drive the price-to-earnings multiple down from its current historical level. The price-to-book ratio is 2.76, indicating that the market values the company at a significant premium over its net asset book value, which is common for service-oriented businesses with intangible brand value. Alternative valuation metrics include a price-to-sales ratio of 1.68 and an EV/EBITDA of 10.30, which suggest the company is trading at a reasonable multiple relative to its sales and earnings power before interest, taxes, depreciation, and amortization. The stock price has historically ranged between a 52-week low of $35.51 and a 52-week high of $49.41, providing a defined range for price analysis relative to recent trading performance. The beta value is 0.93, which indicates that the stock's price volatility is slightly lower than the broader market, suggesting a somewhat defensive characteristic within the consumer cyclical sector.
Growth & Income
Revenue growth year-over-year is recorded at 8.0%, while earnings growth year-over-year is 16.8%, indicating that earnings are growing faster than revenue, which often implies improved operational leverage or cost efficiencies. As a dividend payer, the company offers a dividend yield of 1.0% with a payout ratio of 13.9%, a low payout ratio that suggests the company retains the vast majority of its earnings, ensuring the dividend is highly sustainable even if earnings fluctuate. This conservative payout strategy allows the company to maintain a robust balance sheet while still returning value to shareholders through a consistent income stream. The overall growth and income profile presents a scenario of steady revenue expansion coupled with accelerating profitability and a highly sustainable, albeit modest, dividend yield.