Critical Review: Carriage Services (NYSE:CSV) and Frontdoor (NASDAQ:FTDR)

Carriage Services (NYSE:CSV) and Frontdoor (NASDAQ:FTDR) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Profitability

This table compares Carriage Services and Frontdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carriage Services	11.31%	17.46%	3.50%
Frontdoor	12.96%	124.74%	15.33%

Institutional & Insider Ownership

66.5% of Carriage Services shares are held by institutional investors. 2.7% of Carriage Services shares are held by company insiders. Comparatively, 1.6% of Frontdoor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Carriage Services and Frontdoor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carriage Services	$414.81 million	1.08	$51.51 million	$2.94	9.61
Frontdoor	$2.09 billion	3.12	$255.00 million	$4.00	24.16

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

Risk and Volatility

Carriage Services has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Carriage Services and Frontdoor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carriage Services	1	1	3	0	2.40
Frontdoor	0	2	5	0	2.71

Carriage Services currently has a consensus price target of $52.57, suggesting a potential upside of 86.00%. Frontdoor has a consensus price target of $99.80, suggesting a potential upside of 3.27%. Given Carriage Services’ higher possible upside, equities research analysts plainly believe Carriage Services is more favorable than Frontdoor.

Summary

Frontdoor beats Carriage Services on 11 of the 14 factors compared between the two stocks.

About Carriage Services

Carriage Services, Inc. is a provider of funeral and cemetery services in the United States. The company owns and operates funeral homes and cemeteries, serving families through arrangements for funerals, memorial services, cremations and cemetery interments. Its offerings also include related merchandise and services, such as caskets, urns, burial spaces and memorial products. Carriage Services operates in multiple states and gives its locations a degree of local operating autonomy while providing centralized support.

About Frontdoor

Frontdoor, Inc. provides home service plans and repair solutions in the United States. Its plans help homeowners manage the cost of repairing or replacing covered home systems and appliances, such as heating and cooling equipment, plumbing, and kitchen appliances. The company serves customers through brands including American Home Shield, HSA Home Warranty, and OneGuard Home Warranties. It also connects customers with a network of independent service contractors and offers digital tools and support to help arrange home repairs.