Service Corporation International (NYSE:SCI) & The Providence Service Corporation (PRSC) Critical Review

The Providence Service Corporation (NASDAQ: PRSC) and Service Corporation International (NYSE:SCI) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitabiliy, risk and analyst recommendations.

Profitability

This table compares The Providence Service Corporation and Service Corporation International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Providence Service Corporation 4.05% 9.43% 2.92%
Service Corporation International 9.94% 23.87% 2.25%

Dividends

Service Corporation International pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. The Providence Service Corporation does not pay a dividend. Service Corporation International pays out 38.2% of its earnings in the form of a dividend. The Providence Service Corporation has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of current ratings for The Providence Service Corporation and Service Corporation International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Providence Service Corporation 0 1 0 0 2.00
Service Corporation International 0 1 3 0 2.75

Service Corporation International has a consensus price target of $34.67, suggesting a potential upside of 1.81%. Given Service Corporation International’s stronger consensus rating and higher possible upside, analysts clearly believe Service Corporation International is more favorable than The Providence Service Corporation.

Earnings & Valuation

This table compares The Providence Service Corporation and Service Corporation International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Providence Service Corporation $1.60 billion 0.42 $71.84 million $4.68 10.65
Service Corporation International $3.06 billion 2.09 $803.45 million $1.57 21.69

Service Corporation International has higher revenue and earnings than The Providence Service Corporation. The Providence Service Corporation is trading at a lower price-to-earnings ratio than Service Corporation International, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

93.1% of The Providence Service Corporation shares are held by institutional investors. Comparatively, 85.6% of Service Corporation International shares are held by institutional investors. 18.9% of The Providence Service Corporation shares are held by insiders. Comparatively, 6.2% of Service Corporation International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

The Providence Service Corporation has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Service Corporation International has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Summary

Service Corporation International beats The Providence Service Corporation on 10 of the 17 factors compared between the two stocks.

About The Providence Service Corporation

The Providence Service Corporation (Providence) is a holding company. The Company, through its subsidiaries, is engaged in the provision of healthcare and workforce development services for public and private sector entities. The Company’s segments include Non-Emergency Transportation Services (NET Services), Workforce Development Services (WD Services) and Matrix Investment. NET Services segment includes nationwide provider of non-emergency medical transportation programs for state governments and managed care organizations. WD Services segment is a global provider of employment preparation and placement and legal offender rehabilitation services to eligible participants of government sponsored programs. Matrix Investment segment includes minority interest in nationwide provider of in-home care optimization and management solutions, including comprehensive health assessments (CHAs), to members of managed care organizations, accounted for as an equity method investment.

About Service Corporation International

Service Corporation International is a provider of deathcare products and services, with a network of funeral service locations and cemeteries. The Company’s segments include Funeral, Cemetery and Corporate. It conducts both funeral and cemetery operations in the United States and Canada. As December 31, 2016, it operated 1,502 funeral service locations and 470 cemeteries, including 281 funeral service/cemetery combination locations, which are geographically diversified across 45 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. It offers various brands, such as Dignity Memorial, Dignity Planning, National Cremation Society, Advantage Funeral and Cremation Services, and Funeraria del Angel. Its funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. It sells cemetery property, and funeral and cemetery merchandise and services.

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