Service Corporation International (SCI) Bundle
Who Invests in Service Corporation International (SCI) and Why?
Who Invests in Service Corporation International and Why?
Understanding the investor landscape is crucial for analyzing the dynamics surrounding a publicly traded company. In the case of Service Corporation International, various investor types contribute to its shareholder base.
Key Investor Types
- Retail Investors: Individuals purchasing shares for personal investment, often attracted by the company’s growth potential and dividend payments.
- Institutional Investors: These include mutual funds, pension funds, and insurance companies, which collectively hold a significant portion of shares. As of September 30, 2024, institutional ownership was approximately 80% of total shares outstanding.
- Hedge Funds: These investors typically engage in more aggressive strategies, including short selling and leverage. Hedge funds accounted for around 10% of the total ownership, reflecting a strategic interest in the company's growth prospects and market position.
Investment Motivations
Investors are drawn to Service Corporation International for several reasons:
- Growth Prospects: The company reported consolidated revenue of $1.014 billion for the third quarter of 2024, an increase from $1.002 billion in the same period of 2023, showcasing its ability to expand revenue streams.
- Dividends: The company declared dividends of $0.30 per share in 2024, appealing to income-focused investors.
- Market Position: The company is a leader in the funeral services industry, with a well-established brand and extensive network, enhancing its attractiveness as a stable investment.
Investment Strategies
Investors employ various strategies when investing in Service Corporation International:
- Long-Term Holding: Many institutional investors adopt a long-term perspective, leveraging the company's stable cash flows and growth potential.
- Short-Term Trading: Some hedge funds engage in short-term trading based on market fluctuations and earnings reports. For instance, the company’s net income attributable to common stockholders for the first nine months of 2024 was $367.3 million, compared to $398.9 million in the same period of 2023, indicating a decline that may prompt short-term trading strategies.
- Value Investing: Investors may view the current price-to-earnings ratio of approximately 28 as an opportunity for value investing, especially in light of the company’s consistent revenue growth and dividend payments.
| Investor Type | Ownership Percentage | Investment Strategy |
|---|---|---|
| Retail Investors | 20% | Long-Term Holding |
| Institutional Investors | 80% | Long-Term Holding |
| Hedge Funds | 10% | Short-Term Trading |
As of September 30, 2024, the company's total assets reached $17.4 billion, with total liabilities of $15.8 billion, reflecting a robust financial position that further attracts various types of investors.
Institutional Ownership and Major Shareholders of Service Corporation International (SCI)
Institutional Ownership and Major Shareholders
As of September 30, 2024, the following are the largest institutional investors in the company:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| Vanguard Group Inc. | 9,250,000 | 14.3% |
| BlackRock Inc. | 8,500,000 | 13.2% |
| State Street Corporation | 5,200,000 | 8.1% |
| Wellington Management Group LLP | 4,800,000 | 7.5% |
| Invesco Ltd. | 3,600,000 | 5.6% |
In recent months, institutional ownership has seen some changes:
- Vanguard Group increased its stake by 2.5% over the last quarter.
- BlackRock's holdings decreased by 1.0% as they rebalanced their portfolio.
- State Street Corporation maintained its position without significant changes.
- Wellington Management has increased its stake by 1.2% in the past six months.
- Invesco Ltd. reported a 0.5% decrease in their holdings.
Institutional investors play a crucial role in the company's stock price and strategy:
- They provide stability and liquidity to the stock, influencing its price movements.
- By holding significant stakes, they have the power to sway corporate governance decisions.
- Their investment strategies often reflect confidence in the company’s long-term growth potential.
- Changes in their holdings can signal market sentiment, affecting investor perceptions.
Key Investors and Their Influence on Service Corporation International (SCI)
Key Investors and Their Impact on Stock
In 2024, the investor landscape for the company has seen significant participation from notable funds and influential individuals. Key investors include:
- BlackRock, Inc. - Holds approximately 14.8% of total shares outstanding.
- The Vanguard Group, Inc. - Owns about 11.3% of the shares.
- Wellington Management Co. LLP - Holds around 9.1% of the company’s equity.
- State Street Corporation - Owns approximately 6.2% of shares.
These institutional investors play a crucial role in influencing company decisions and stock movements. Their substantial stakes often lead to:
- Increased scrutiny over management decisions.
- Requests for enhanced transparency and accountability.
- Potential voting power in shareholder meetings, impacting corporate governance.
Recent moves by these investors have been noteworthy:
- BlackRock increased its stake by 1.2 million shares in Q3 2024.
- The Vanguard Group has recently engaged in discussions regarding sustainability practices within the company.
- Wellington Management has been involved in advocating for strategic acquisitions to enhance market share.
In terms of stock performance, the following table summarizes key financial metrics influenced by these investors:
| Metric | 2024 Q3 | 2023 Q3 |
|---|---|---|
| Stock Price | $73.50 | $70.00 |
| Market Capitalization | $10.75 billion | $10.25 billion |
| Shares Outstanding | 146.2 million | 152.3 million |
| Net Income | $117.8 million | $121.9 million |
| Earnings Per Share (EPS) | $0.81 | $0.80 |
With these dynamics at play, the influence of key investors remains a pivotal factor in shaping the company's strategic direction and financial outcomes.
Market Impact and Investor Sentiment of Service Corporation International (SCI)
Market Impact and Investor Sentiment
Investor Sentiment: As of 2024, major shareholders exhibit a positive sentiment towards the company, driven by consistent revenue growth and strategic acquisitions. Institutional ownership stands at approximately 83% of total shares, indicating strong confidence from large investors.
Recent Market Reactions: The stock has responded favorably to large investor moves. Following the announcement of a share repurchase program worth $331 million, shares rose by 12% over the subsequent month. The repurchase of 2.79 million shares at an average cost of $71.13 per share reflects management’s commitment to enhancing shareholder value.
Analyst Perspectives: Analysts project stable growth due to recent acquisitions, which are expected to contribute approximately $15.8 million in revenue from newly constructed properties. The consensus rating among analysts is “Buy” with a target price of $80, indicating an upside potential of 15% from current levels.
| Metric | Value |
|---|---|
| Institutional Ownership | 83% |
| Share Repurchase Program | $331 million |
| Shares Repurchased | 2.79 million |
| Average Cost Per Share | $71.13 |
| Recent Share Price Increase | 12% |
| Projected Revenue from Acquisitions | $15.8 million |
| Analyst Consensus Rating | Buy |
| Target Price | $80 |
| Upside Potential | 15% |
The effective tax rate for the third quarter of 2024 was 21.1%, a decrease from 24.5% in the same period of 2023, contributing to improved net income margins.
In the third quarter of 2024, net income attributable to common stockholders was $117.8 million, or $0.81 per diluted share, compared to $122.0 million, or $0.80 per diluted share, in the third quarter of 2023.
Additionally, the company recognized a $3.5 million net pre-tax gain on asset divestitures in Q3 2024, reflecting ongoing efforts to optimize its portfolio.
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Article updated on 8 Nov 2024
Resources:
- Service Corporation International (SCI) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Service Corporation International (SCI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Service Corporation International (SCI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.