Service Corp International (SCI-N)

NA's leading death-care company. Consolidator in a fragmented industry. 15-16% market share. Size and scale are a meaningful advantage, as is financial strength. Two closest rivals are encountering financial difficulties. 30% ROE and rising. 

After a couple of tough Covid years, should return to historic 14% earnings as well as dividend growth. Good combination of value and high-visibility, non-cyclical, non-discretionary growth. Testing all-time highs. Yield is 1.7%. 

This funeral company is in a fragmented sector, yet there is good growth opportunity given current demographics. The stock is up 19% over the year, so he feels the stock needs to grow into this current valuation and it won’t happen overnight.

He likes the industry because it is a good, predictable business. Demographics are leading to increases in volumes. It pays a dividend. There is a secular trend in the industry.

(A Top Pick Aug 17/16. Up 34.4%.) A very boring, steady business that is probably going to improve over time. A really well run business and he likes management. Felt it became fully priced, and would look for a better entry price.

A pretty boring, steady business. An industry he has followed and been invested in for a long time. This is a much higher quality company than StoneMor (STON-N). They operate both funeral homes and cemeteries. The largest player and a consolidator in a fragmented industry, and have made a number of acquisitions which have been very accretive for them. Thinks they will continue to consolidate. Demographics are favourable. There are fairly high barriers to entry for competition.

The leading consolidator in the funeral industry. Excellent management. A big, diversified business. Have been acquiring other companies in the US.

(A Top Pick Feb 21/14. Up 39.64%.) No longer as cheap as it used to be and is trading at a premium valuation. People like the stability of the funeral/Cemetery business. The largest in North America and has been a really aggressive consolidator.

Largest funeral home in North America. A sector where there has been a lot of consolidation. Likes the sector. Excellent management team that were very successfully at buying companies. You will see a lot of benefit over the next year or two from free cash flow.

Funeral service company. He had a position but they were taken out. STEI.O took them out and he holds his position in this. There were synergies in combining the two businesses. They will be accretive to earnings per share.