A record rise in the death rate of nearly 17% occurred in 2020 according to final data from the U.S. Centers of Disease Control and Prevention’s National Center for Health Statistics.
The death rate spike – approximately 835 deaths per 100,000 people – was the sharpest increase in more than a century since the CDC began tracking the relevant data.
Heart disease and cancer persisted as the leading causes of death in 2020. Nine out of the top ten leading causes of death in the U.S remained the same.
Obviously, Covid-19 was a big part of the increase. The virus claimed hundreds of thousands of lives last year as it was responsible for more than 10% of all deaths. It was the third leading cause of death overall.
Yet what’s just as concerning is the rise in deaths from other causes. The impact that the pandemic has had on all aspects of individual health is noteworthy and deserves more attention.
In addition to people dying from the virus, diminished access to medical care and medication as well as mental health services contributed to the rise in non-Covid deaths. CDC preliminary data showed that drug overdose deaths topped 100,000 for the first time ever during the one-year period ending April 2021.
Let’s be clear about something – no one wants to profit from the suffering of their neighbor, particularly at a time in history during which a pandemic has ravaged through society. Investors can choose to invest in what they are comfortable with, or choose not to invest in something because they are not comfortable with the idea. And there’s nothing wrong with either approach.
Investing in funeral companies is nothing new as these companies have been around for a long time. The three firms we will discuss below are outperforming the market. Funeral companies are businesses and provide a service to those in need, just like companies in different industries provide a product or service to customers who require assistance.
By no means are we downplaying the souls lost since the start of the pandemic (may they rest in peace). We’re not here to debate the ethical side of this – we’re simply pointing out facts and guiding investors to top stock opportunities. And while investing in funeral companies may be controversial and lack excitement, there’s a reason they are outperforming the market.
The Zacks Funeral Services industry group is ranked in the top 15% out of all 253 industry groups. This group contains all three companies we will analyze below and has climbed nearly 38% on the year, outpacing the major indices.
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Quantitative studies have shown that roughly half of a stock’s price movement can be attributed to its industry group. By investing in stocks ranked within the top Zacks Ranked Industries, you can dramatically improve your portfolio performance.
The Funeral Services group is also relatively undervalued with an average P/E of 14.44. And with above-average historical sales growth, dividend increases, and earnings growth, its not difficult to understand why these companies likely still have room to run.
Carriage Services (NYSE:CSV), Inc. (CSV)
Carriage Services is a leading provider of death care services and products. Based in Houston, TX, Carriage Services provides funerals, burials and cremations, cemetery interment services, as well as the use of funeral homes and motor vehicles. CSV also sells products and merchandise including caskets, vaults, garments, and memorials.
CSV boasts a Zacks #2 Buy ranking and has exceeded earnings estimates in each of the last seven quarters. The company has posted an average earnings surprise of +27.96% over the past four quarters, supporting the stock’s 102.1% return this year. CSV most recently reported EPS of $0.82 back in October, a +38.98% surprise over consensus.
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