Is SCI a good stock to buy? We came across a bullish thesis on Service Corporation International on Quality At A Fair Price’s Substack. In this article, we will summarize the bulls’ thesis on SCI. Service Corporation International’s share was trading at $71.29 as of June 8th. SCI’s trailing and forward P/E were 18.39 and 16.45 respectively according to Yahoo Finance.
Service Corporation International (SCI) is North America’s leading provider of funeral, cremation, and cemetery services, operating nearly 2,000 locations across the United States, Canada, Puerto Rico, and the District of Columbia. The company benefits from a highly resilient and recurring business model driven by steady long-term demand, giving it a durable competitive position within the deathcare industry.
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SCI has consistently demonstrated strong operational execution and shareholder-friendly capital allocation, highlighted by 15 consecutive years of dividend increases. The company typically raises its dividend in the high single-digit range, reinforcing management’s confidence in the stability and cash-generating ability of the business.
SCI’s current dividend yield stands at 1.71%, slightly above its 5-year average yield of 1.62%, implying the stock is modestly undervalued by roughly 6% based on Dividend Yield Theory. This discount appears attractive given the company’s strong fundamentals, defensive characteristics, and consistent earnings growth profile. The business continues to generate robust free cash flow, which supports ongoing dividend growth, share repurchases, and strategic investments across its funeral and cemetery network.
Looking ahead, Service Corporation International offers a compelling forward return profile, with an estimated future CAGR of 13.37%. A significant portion of this return is expected to come from projected EPS growth of more than 10.5%, supported by pricing power, operational efficiencies, and continued demand for its services. Combined with reliable dividend growth and defensive industry exposure, SCI represents an attractive long-term compounder with both stability and upside potential for investors.
Previously, we covered a bullish thesis on Waste Management, Inc. by Francesco Ferrari in April 2025, which highlighted the company’s low-volatility market outperformance, resilient business model, and consistent long-term compounding driven by strong profitability metrics. WM’s stock price has depreciated by approximately 6.39% since our coverage. Quality At A Fair Price shares a similar view but emphasizes on defensive cash flows and dividend growth consistency through Service Corporation International.
Service Corporation International is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held SCI at the end of the first quarter which was 30 in the previous quarter. While we acknowledge the risk and potential of SCI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SCI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
