Death and taxes might be the two certainties of life. And when it comes to investing, taxes are unavoidable as well.
But investors do have a choice when it comes to death and whether or not it belongs in their portfolio.
Some might speculate the so-called death-care industry might be doing well given the aging population. But to find out if death stocks might warm over your portfolio, we can create a custom stock index we’ll call the death-dex. This index tracks how well six large publicly traded funeral- and death-related stocks have done in the near and long term.
First, here’s a run-down of the death stocks I’ve included in the death-dex:
- Hillenbrand (HI)
- Stewart Enterprises (STEI)
- StoneMor Partners (STON)
- Carriage Services (CSV)
- Service Corp. (SCI)
- Matthews International (MATW)
After analyzing these stocks, using S&P Capital IQ’s custom index function, investors see a clear picture that death has been lucrative for investors.
The death-dex is up more than 5% this year. That might not sound great until you consider that the Standard & Poor’s 500 index was essentially flat during the year.
Longer term, death has been pushing up returns, too. Over the past three years, the death-dex is up more than 60%, topping the S&P 500’s roughly 40% gain. Over the past 10 years, death has been even more sweet to investors, relative to other stocks. The death-dex has rocketed more than 60% over the past 10 years, topping the roughly 10% gain by the S&P 500.
To answer your question, death stocks have performed significantly better than most stocks over the near and longer term.
But before you dig up some funeral stocks and add them to your portfolio, some caution is in order. Remember that just because some stocks have done well over recent years doesn’t mean that out-performance will continue. Industry trends can change and dramatically alter the profitability of the players.
Even so, the death-care industry has certainly generated some hair-raising returns for investors, even as the rest of the market has been largely dead.
