Death and taxes, the saying goes, are the only certainties in life
NEW YORK — Death and taxes, the saying goes, are the only certainties in life. If so, funeral companies like Houston's Service Corporation International might look like a sure bet to investors.
The slow-growing but inevitable business is supported by the aging U.S. population: By 2030, the share of population older than 65 will climb to 21%, up from 15% in 2020, according to the Census Bureau.
Service Corporation International and rival Carriage Services have both seen their revenue rise over the past decade. Industry consolidation has helped bolster their pricing power at a time when privately-owned and family-run businesses still dominate. Profit margins have remained relatively steady despite the squeeze from inflation.
The National Funeral Directors Association is forecasting that overall industry revenue will grow at an annualized rate of 1.2%, reaching $20.2 billion in 2029.
Funeral expenses jumped 5.1% in 2023, according to inflation data from the consumer price index. That follows a 3.3% jump in 2022. Even with inflation easing, the factors that drove those big jumps, such as demographic shifts are likely to keep pushing expenses higher. Price increases for services and materials are not likely to reverse.
The median cost of a funeral with burial hit $8,300 in 2023, up from $7,848 in 2021, according to the National Funeral Directors Association. The median cost of a funeral with a cremation cost $6,280 in 2023, up from $5,810 in 2021.
Consumers are massively opting for the cheaper choice for their last earthly purchase: The cremation rate reached 60.5% in 2023, compared with a burial rate of 34.5%, according to the National Funeral Directors
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