FILE - Workers prepare a gravesite, lower left, April 1, 2020, at Calvary Cemetery in the Queens borough of New York. . If so, funeral companies like Houston's Service Corporation International might look like a sure bet to investors.
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.
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.
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 Association.