The 2012 to 2013 Flu Season is in full force and it looks stronger than we have seen in years. If you look at the Google map of the Flu season the outbreak map of the lower-48 states shows that “High” is for only 7 states and “Intense” is used for the other 43. That is bad news for you, your families, and for me. Flu season deaths are classified as being at epidemic levels right now. It is hard to take the financial angle of many tragedies, but the current flu season is likely to act as a boost for cemetery owners, funeral homes, and those supplying the death care industry.
The CDC reported that the proportion of all U.S. deaths caused by pneumonia and flu symptoms was 7.3% in the last week, and that above the epidemic threshold of 7.2%. The CDC figures use different measurements than Google but it said that California and the Southwest were at “normal” levels of flu while the other 9 regions of America were at “elevated” flu activity. Another issue is tha the flu vaccine which was administered this year was 62% effective and that is only a moderate effectiveness.
Service Corp. International (NYSE: SCI) is the largest funeral home operator and owner of cemeteries in the world with a market value of more than $3 billion. Its stock is at $14.35 against a 52-week range of $10.58 to $14.58. Its shares moved up 4% after the start of 2013 but have since stabilized. Service Corp. pays a disappointing dividend of just under 1.7%. Service Corp. came public in the summer of 1987, right before the market crashed in October and its shares suffered along with the rest of the market. Its shares dipped under $4 during the peak panic selling pressure of the last recession.
Stonemor Partners LP (NYSE: STON) is another cometary owner and operator and its price of $23.20 compares to a 52-week range of $20.10 to $28.68. We would note that there is a 10% dividend here. StoneMor has been public since 2005.
Carriage Services Inc. (NYSE: CSV) trades at $13.00 against a 52-week range of $5.61 to $13.59 and its market cap is only $235 million. This funeral home outfit has paid a dividend for less than two years now and its yield is only about 0.08%. Carriage Services came public in 1996.
Hillenbrand, Inc. (NYSE: HI) owns the Batesville Casket outfit and is worth some $1.47 billion, but it also has an industrial segment of its business. At $23.45 its 52-week range is $16.75 to $24.18. Its dividend yield is close to 3.3%. Due to a corporate break-up this goes back only to 2008, but Batesville has been operating for what the company says is more than 100 years.
Stewart Enterprises Inc. (NASDAQ: STEI) has multiple funeral and cemetery products and services for the death care industry and at $7.80 its market cap is about $660 million. Its 52-week trading range is $4.92 to $8.65 and its yield is close to 2.05%. It has been public since the early 1990s.
Matthews International Corporation (NASDAQ: MATW) is in the memorialization products and solutions for the cemetery and funeral home industries. At #43.75 its 52-week range is $27.42 to $34.36 and its market cap is $904 million. The yield here is 1.2% and it has been public since 1994.
The Google Flu Trends map noted, “Estimates were made using a model that proved accurate when compared to historic official flu activity data. Data current through January 10, 2013. Estimates for Connecticut for weeks 2012-12-16 to 2013-01-06 were affected by a software glitch and were retroactively updated on January 9, 2013.” If you look at the peak months of flu season from a year ago they were considered to be moderate and two years ago they only reached “high” in early 2011. The last high session was in late-2010 and it was high in the early 2009 period. The current period actually appears to be the only times that “Intense” has been used for 3 periods in a row.
It is hard to not report on certain issues from the financial side of the equation without sounding insensitive. The flu season is no joke, particularly for the deaths and the social impact it has for families that we are seeing and hearing about. It is also hard to forget that one quarter a long time ago on a Service Corp. disappointing earnings report that the company blamed part of its earnings weakness due to a very soft flu season.