1.57% Dividend Yield, 15 Years of Dividend Hikes – The Largest Funeral Services Provider In North America
This business has demographics on its side: aging populations drive predictable demand for funeral homes and cemeteries, with revenue that’s recession‑resistant and margins that improve as scale kicks in. It’s not pretty, but the model—thousands of locations, preneed sales for future services, and operational efficiency—turns a somber industry into a steady cash flow machine. That setup lets it compound through cycles, quietly growing revenue and dividends while most people look the other way.
Service Corporation International (SCI)
Financial Score: 87 / 99
Quick Tip
To keep your portfolio strong, stay on top of the financials for each company you hold. Solid companies mean better returns, so be sure to check in on their quarterly and annual numbers.Interesting stocks usually score 80+ on the Financial Scale, with top players hitting 90+. If that score dips below 80, it might be a good time to consider cutting ties before things take a turn.Service Corporation International (SCI) is the largest provider of funeral, cemetery, and cremation services in North America, operating 1,992 funeral service locations and 1,471 cemeteries across 44 states and eight Canadian provinces. Headquartered in Houston, Texas, it generates revenue from at‑need services, preneed contracts, and cemetery merchandise, with a focus on consolidation and efficiency in a fragmented market. From its 1962 founding as the first publicly traded deathcare company, it has scaled into a $4.3 billion revenue leader with a preneed backlog that smooths demand.
Dividend machine: low ratio, explosive hikes
SCI pays $1.36 per share annually, which is a 1.57% yield but backed by a 35.79% payout ratio—tons of room to grow. The 15 consecutive years of dividend growth and +67.00% dividend growth over the last five years mean the board has been aggressive with raises, doubling the payout while earnings expanded. It’s sustainable because preneed sales create a backlog (up 3% to $14.5 billion), cash flow is reliable ($966 million adjusted operating cash flow in 2025), and margins are improving. This isn’t a yield chase; it’s a growth dividend from a business that’s as predictable as it gets.
Q4 2025: revenue up 1.7%, adjusted EPS up 8%
For Q4 2025, reported February 11, 2026, Service Corporation posted revenue of $1.11 billion, up 1.7% year over year (slightly below estimates), with adjusted EPS of $1.14 (up 8% from $1.06). Net income attributable to common stockholders was $159.4 million ($1.13 diluted EPS), operating income was $275.6 million, and adjusted EBITDA was $368.7 million. Full‑year 2025 revenue reached $4.3 billion, adjusted EPS was $3.85 (up 9%), and adjusted operating cash flow hit $966 million (up 11%).
Growth levers: preneed backlog, acquisitions, and margin expansion
SCI’s preneed trust assets grew 3% to $14.5 billion at year‑end 2025, providing visibility into future revenue as contracts convert to services. The company repurchased $59 million in shares in Q4 (full‑year $300 million) while investing in tuck‑in acquisitions and digital tools to boost preplanning sales. Gross profit margins improved 70 basis points in cemeteries, and 2026 adjusted EPS guidance is $4.05–$4.35 (midpoint up 10%), signaling confidence in volume recovery and efficiency.
Fun Fact – The first publicly traded funeral company
SCI was the first deathcare company to go public in 1962, pioneering consolidation in an industry of family‑owned parlors and turning fragmented assets into a national network.
Final Take – A recession‑proof dividend with demographic tailwinds
Service Corporation offers a 1.57% yield, $1.36 annual dividend, 35.79% payout ratio, 15 years of hikes, and +67.00% 5‑year dividend growth from a business with $14.5 billion preneed backlog. Q4 2025 (reported Feb. 11, 2026) showed $1.11 billion revenue (up 1.7%), $159.4 million net income ($1.13 EPS), $1.14 adjusted EPS (up 8%), full‑year $4.3 billion revenue and $3.85 adjusted EPS. Financial Score: 87. That’s a strong level but not bulletproof—companies above 90 are the elite tier; risks include volume softness and labor costs, but demographics and preneed make it a durable dividend compounder.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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