Critical Analysis: Service Corporation International (SCI) versus Graham (GHC)
Service Corporation International (NYSE: SCI) and Graham (NYSE:GHC) are both mid-cap consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Insider & Institutional Ownership
84.5% of Service Corporation International shares are owned by institutional investors. Comparatively, 69.0% of Graham shares are owned by institutional investors. 6.2% of Service Corporation International shares are owned by insiders. Comparatively, 22.5% of Graham shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Service Corporation International has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Graham has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.
Service Corporation International pays an annual dividend of $0.60 per share and has a dividend yield of 1.6%. Graham pays an annual dividend of $5.08 per share and has a dividend yield of 0.9%. Service Corporation International pays out 31.6% of its earnings in the form of a dividend. Graham pays out 22.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Graham has increased its dividend for 5 consecutive years.
This is a summary of recent ratings and recommmendations for Service Corporation International and Graham, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Service Corporation International||0||0||3||0||3.00|
Service Corporation International currently has a consensus price target of $39.67, suggesting a potential upside of 6.43%. Given Service Corporation International’s higher possible upside, analysts plainly believe Service Corporation International is more favorable than Graham.
Valuation and Earnings
This table compares Service Corporation International and Graham’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Service Corporation International||$3.03 billion||2.31||$177.03 million||$1.90||19.62|
|Graham||$2.48 billion||1.30||$168.59 million||$22.20||26.35|
Service Corporation International has higher revenue and earnings than Graham. Service Corporation International is trading at a lower price-to-earnings ratio than Graham, indicating that it is currently the more affordable of the two stocks.
This table compares Service Corporation International and Graham’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Service Corporation International||11.83%||24.85%||2.38%|
Service Corporation International beats Graham on 11 of the 16 factors compared between the two stocks.
Service Corporation International Company Profile
Service Corporation International is a provider of deathcare products and services, with a network of funeral service locations and cemeteries. The Company’s segments include Funeral, Cemetery and Corporate. It conducts both funeral and cemetery operations in the United States and Canada. As December 31, 2016, it operated 1,502 funeral service locations and 470 cemeteries, including 281 funeral service/cemetery combination locations, which are geographically diversified across 45 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. It offers various brands, such as Dignity Memorial, Dignity Planning, National Cremation Society, Advantage Funeral and Cremation Services, and Funeraria del Angel. Its funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. It sells cemetery property, and funeral and cemetery merchandise and services.
Graham Company Profile
Graham Holdings Company, formerly The Washington Post Company, is a diversified education and media company whose principal operations include educational services, television broadcasting, cable television systems, and online, print and local TV news. The Company owns Kaplan, a provider of educational services to individuals, schools and businesses, serving over one million students annually with operations in more than 30 countries. Its programs include higher education, test preparation, language instruction and professional training. Its Post-Newsweek Stations, Inc owns six television stations which include WDIV-Detroit (NBC), KPRC-Houston (NBC),WPLG-Miami (ABC), WKMG-Orlando (CBS), KSAT-San Antonio (ABC) and WJXT-Jacksonville (independent). The stations also broadcast digital channels focusing on classic television and lifestyle programming, in addition to operating mobile sites and mobile applications delivering breaking news, weather and community news.
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