StoneMor Partners L.P. (NYSE: STON) and Carriage Services (NYSE:CSV) are both small-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

This table compares StoneMor Partners L.P. and Carriage Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
StoneMor Partners L.P. N/A N/A N/A
Carriage Services 8.35% 15.25% 3.16%

Risk & Volatility

StoneMor Partners L.P. has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Carriage Services has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for StoneMor Partners L.P. and Carriage Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
StoneMor Partners L.P. 0 4 0 0 2.00
Carriage Services 0 1 1 0 2.50

StoneMor Partners L.P. presently has a consensus target price of $12.00, suggesting a potential upside of 86.63%. Carriage Services has a consensus target price of $57.00, suggesting a potential upside of 136.02%. Given Carriage Services’ stronger consensus rating and higher probable upside, analysts clearly believe Carriage Services is more favorable than StoneMor Partners L.P..

Dividends

StoneMor Partners L.P. pays an annual dividend of $1.32 per share and has a dividend yield of 20.5%. Carriage Services pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. StoneMor Partners L.P. pays out -128.2% of its earnings in the form of a dividend. Carriage Services pays out 16.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. StoneMor Partners L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares StoneMor Partners L.P. and Carriage Services’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
StoneMor Partners L.P. $316.56 million 0.72 $4.14 million ($1.03) -6.24
Carriage Services $255.01 million 1.58 $72.65 million $1.18 20.47

Carriage Services has higher revenue, but lower earnings than StoneMor Partners L.P.. StoneMor Partners L.P. is trading at a lower price-to-earnings ratio than Carriage Services, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

25.6% of StoneMor Partners L.P. shares are owned by institutional investors. Comparatively, 86.9% of Carriage Services shares are owned by institutional investors. 9.8% of StoneMor Partners L.P. shares are owned by insiders. Comparatively, 18.2% of Carriage Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Carriage Services beats StoneMor Partners L.P. on 12 of the 15 factors compared between the two stocks.

About StoneMor Partners L.P.

StoneMor Partners L.P. owns and operates cemeteries and funeral homes. The Company operates through two segments: Cemetery Operations and Funeral Homes. Its Cemetery Operations segment sells interment rights, caskets, burial vaults, cremation niches, markers and other cemetery related merchandise. Its Funeral Homes segment offers a range of services, including family consultation, final expense insurance products, the removal and preparation of remains, provision of caskets and related funeral merchandise, the use of funeral home facilities for visitation, worship and performance of funeral services, and transportation services. It sells cemetery products and services both at the time of death, which it refers to as at-need, and prior to the time of death, which it refers to as pre-need. It operates approximately 310 cemeteries in over 30 states and Puerto Rico, and approximately 100 funeral homes in over 20 states and Puerto Rico.

About Carriage Services

Carriage Services, Inc. is a provider of death care services and merchandise in the United States. The Company operates in two business segments: Funeral Home Operations and Cemetery Operations. The Funeral Homes segment provides funeral services (traditional burial and cremation) and sells related merchandise, such as caskets and urns. Its cemetery products and services include interment services, the rights to interment in cemetery sites and related cemetery merchandise, such as memorials and vaults. It serves suburban and rural markets. It provides funeral and cemetery services and products on both at-need (time of death) and preneed (planned prior to death) basis. It also maintains trusts in connection with funeral home and cemetery operations, including preneed funeral trusts, preneed cemetery merchandise and service trusts and cemetery perpetual care trusts. As of December 31, 2016, it operated 170 funeral homes in 28 states and 32 cemeteries in 11 states.

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