Service Corporation International Common Stock (SCI)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Generates $410 million in annual free cash flow (3.5% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 32.7% demonstrating efficient capital deployment
• Established organization with 17,869 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($32) with negative 169% margin of safety—limited downside protection
• High leverage at 3.18x debt-to-equity increases financial risk and interest expense burden
• Anemic revenue growth of 1.7% for a company of this size limits long-term upside
• Altman Z-Score of 0.5 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Service Corporation International Common Stock is a mid-cap consumer cyclical company valued at $11.9 billion. The business generates $4.3 billion in annual revenue with a 3.7% net margin and $410 million in free cash flow. From a quality standpoint, Service shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.5 warrants caution. On valuation, the stock is reasonably priced at 22.7x earnings, with trades far above its Graham Number ($32) with no margin of safety. Growth dynamics show revenue growing at 1.7% and profit growth of 5.3%. The 1.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $410 million in annual free cash flow (3.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 3.2x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Sluggish 2% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer