Service Co. International (SCI) Cut to “Sell” at Zacks Investment Research

Zacks Investment Research downgraded shares of Service Co. International (NYSE:SCI) from a hold rating to a sell rating in a research report released on Monday.

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.”

A number of other research analysts also recently weighed in on SCI. ValuEngine raised shares of Service Co. International from a hold rating to a buy rating in a research report on Monday, September 17th. Credit Suisse Group raised their target price on shares of Service Co. International from $46.00 to $50.00 and gave the company an outperform rating in a research report on Monday, September 17th. Oppenheimer raised their target price on shares of Service Co. International from $42.00 to $47.00 and gave the company an outperform rating in a research report on Friday, October 26th. Finally, Raymond James raised their target price on shares of Service Co. International from $45.00 to $47.00 and gave the company a strong-buy rating in a research report on Wednesday, October 31st. Two analysts have rated the stock with a sell rating, five have issued a buy rating and one has assigned a strong buy rating to the company’s stock. The company has a consensus rating of Buy and a consensus target price of $46.17.



Shares of SCI stock opened at $46.07 on Monday. The company has a quick ratio of 0.49, a current ratio of 0.54 and a debt-to-equity ratio of 2.38. Service Co. International has a 12-month low of $35.19 and a 12-month high of $47.09. The firm has a market cap of $8.23 billion, a PE ratio of 29.72, a P/E/G ratio of 2.01 and a beta of 1.06.

Service Co. International (NYSE:SCI) last issued its quarterly earnings data on Monday, October 29th. The company reported $0.35 earnings per share (EPS) for the quarter, missing the Thomson Reuters’ consensus estimate of $0.36 by ($0.01). Service Co. International had a return on equity of 22.47% and a net margin of 15.76%. The company had revenue of $778.80 million for the quarter, compared to the consensus estimate of $762.60 million. During the same period in the prior year, the company earned $0.33 EPS. The firm’s revenue was up 6.5% on a year-over-year basis. On average, research analysts anticipate that Service Co. International will post 1.82 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which will be paid on Monday, December 31st. Investors of record on Friday, December 14th will be given a $0.17 dividend. This represents a $0.68 dividend on an annualized basis and a yield of 1.48%. The ex-dividend date is Thursday, December 13th. Service Co. International’s dividend payout ratio (DPR) is currently 43.87%.

In related news, VP Steven A. Tidwell sold 9,300 shares of the firm’s stock in a transaction on Thursday, November 29th. The shares were sold at an average price of $45.90, for a total value of $426,870.00. Following the completion of the transaction, the vice president now owns 55,897 shares of the company’s stock, valued at $2,565,672.30. The transaction was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, VP Elisabeth G. Nash sold 53,600 shares of the firm’s stock in a transaction on Friday, November 9th. The shares were sold at an average price of $44.47, for a total transaction of $2,383,592.00. The disclosure for this sale can be found here. In the last ninety days, insiders sold 314,400 shares of company stock valued at $14,012,985. 6.20% of the stock is owned by insiders.

A number of institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. grew its position in shares of Service Co. International by 3.0% in the 2nd quarter. BlackRock Inc. now owns 17,373,394 shares of the company’s stock valued at $621,792,000 after acquiring an additional 499,259 shares during the period. Vanguard Group Inc. grew its position in shares of Service Co. International by 0.7% in the 3rd quarter. Vanguard Group Inc. now owns 15,776,201 shares of the company’s stock valued at $697,308,000 after acquiring an additional 113,245 shares during the period. Select Equity Group L.P. grew its position in shares of Service Co. International by 1.2% in the 3rd quarter. Select Equity Group L.P. now owns 10,328,848 shares of the company’s stock valued at $456,535,000 after acquiring an additional 117,610 shares during the period. Baillie Gifford & Co. bought a new position in shares of Service Co. International in the 3rd quarter valued at about $358,950,000. Finally, First Manhattan Co. grew its position in shares of Service Co. International by 13.0% in the 3rd quarter. First Manhattan Co. now owns 4,098,667 shares of the company’s stock valued at $181,161,000 after acquiring an additional 469,944 shares during the period. 87.15% of the stock is owned by institutional investors and hedge funds.

Service Co. International Company Profile

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.

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