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13-01-2015, 11:21 PM
The Most Defensive Industry to invest,100% guaranteed never obsolete business
The most defensive industry in the world is death care. According to the National Funeral Directors Association, the number of deaths per 1,000 of population is expected to rise from the rate of eight per year in 2011, the most recent available data, to 8.4 by 2020, 8.9 by 2030, and nearly 10 by 2045. This is a compound annual growth rate of about 2.9%. What's more, it is likely that the number of deaths will continue to rise as the median age of the US population continues to rise.
The industry is fragmented
Companies like Service Corporation International (NYSE: SCI ) and Carriage Services (NYSE: CSV ) are set to benefit from this trend. However, the death-care industry is highly fragmented and approximately 86% of the funeral homes within the United States are privately owned. That said, despite the rising number of deaths during the past decade, the number of US funeral homes has actually declined around 9.5% over the same period, according to data from 2012. Despite this decline in death-care facilities, funeral home revenue actually expanded 8% during the period 2002-2007, indicating that the facilities are becoming more and more popular.
Having said all of that, the number of cremations taking place instead of burials is rising, not good for death-care facilities. The average cost of a funeral + burial was $6,560 back in 2009; factoring in inflation, we can assume the average cost now stands at around $7,400. Obviously, the cost of a cremation would be significantly less than a burial as 50% of the funeral + burial cost is for a casket, use of a hearse, and embalming of the body.
The most defensive industry in the world is death care. According to the National Funeral Directors Association, the number of deaths per 1,000 of population is expected to rise from the rate of eight per year in 2011, the most recent available data, to 8.4 by 2020, 8.9 by 2030, and nearly 10 by 2045. This is a compound annual growth rate of about 2.9%. What's more, it is likely that the number of deaths will continue to rise as the median age of the US population continues to rise.
The industry is fragmented
Companies like Service Corporation International (NYSE: SCI ) and Carriage Services (NYSE: CSV ) are set to benefit from this trend. However, the death-care industry is highly fragmented and approximately 86% of the funeral homes within the United States are privately owned. That said, despite the rising number of deaths during the past decade, the number of US funeral homes has actually declined around 9.5% over the same period, according to data from 2012. Despite this decline in death-care facilities, funeral home revenue actually expanded 8% during the period 2002-2007, indicating that the facilities are becoming more and more popular.
Having said all of that, the number of cremations taking place instead of burials is rising, not good for death-care facilities. The average cost of a funeral + burial was $6,560 back in 2009; factoring in inflation, we can assume the average cost now stands at around $7,400. Obviously, the cost of a cremation would be significantly less than a burial as 50% of the funeral + burial cost is for a casket, use of a hearse, and embalming of the body.