Reviewing Matthews International (NASDAQ:MATW) and Service Corporation International (NYSE:SCI)

Service Corporation International (NYSE:SCI) and Matthews International (NASDAQ:MATW) are both consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Service Corporation International	12.58%	32.35%	3.05%
Matthews International	-4.62%	11.04%	2.66%

Insider and Institutional Ownership

85.5% of Service Corporation International shares are owned by institutional investors. Comparatively, 83.1% of Matthews International shares are owned by institutional investors. 4.4% of Service Corporation International shares are owned by company insiders. Comparatively, 4.1% of Matthews International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Service Corporation International pays an annual dividend of $1.28 per share and has a dividend yield of 1.6%. Matthews International pays an annual dividend of $1.00 per share and has a dividend yield of 4.7%. Service Corporation International pays out 35.2% of its earnings in the form of a dividend. Matthews International pays out -39.2% 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. Service Corporation International has increased its dividend for 15 consecutive years and Matthews International has increased its dividend for 30 consecutive years. Matthews International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Service Corporation International and Matthews International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Service Corporation International	$4.19 billion	2.66	$518.65 million	$3.64	21.50
Matthews International	$1.80 billion	0.37	-$59.66 million	($2.55)	-8.35

Service Corporation International has higher revenue and earnings than Matthews International. Matthews International 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.

Analyst Recommendations

This is a summary of recent recommendations for Service Corporation International and Matthews International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Service Corporation International	0	0	4	0	3.00
Matthews International	0	0	1	0	3.00

Service Corporation International currently has a consensus price target of $89.25, indicating a potential upside of 14.07%. Matthews International has a consensus price target of $40.00, indicating a potential upside of 87.88%. Given Matthews International’s higher probable upside, analysts plainly believe Matthews International is more favorable than Service Corporation International.

Volatility and Risk

Service Corporation International has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Matthews International has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Summary

Service Corporation International beats Matthews International on 11 of the 16 factors compared between the two stocks.

About Service Corporation International

Service Corp. International engages in the provision of funeral goods and services. It operates through the Funeral and Cemetery segments. The Funeral segment offers services related to cremations, including the use of home facilities and motor vehicles, arranging and directing services, removal, preparation, embalming, memorialization, and catering. The Cemetery segment provides property interment rights, including lawn crypts, mausoleum spaces, niches, and interment options. The company was founded by Robert L. Waltrip in July 1962 and is headquartered in Houston, TX.

About Matthews International

Matthews International Corporation provides brand solutions, memorialization products, and industrial technologies worldwide. It operates through three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions. The Memorialization segment provides bronze and granite memorials, upright granite memorials and monuments, concrete burial vaults, cremation memorialization products, granite benches, flower vases, crypt plates and letters, cremation urns, niche units, cemetery features, and statues, as well as bronze plaques, letters, emblems, vases, lights and photo ceramics, granite monuments, mausoleums, crypts, and flush memorials. The Industrial Technologies segment designs, manufactures, services, and distributes high-tech custom energy storage solutions, and product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking, and conveying consumer and industrial products. This segment also provides engineered calendaring, laminating, and coating equipment; stand-alone marking products; laser and ink-jet printing systems; and spare parts, calendar, and coating-roller refurbishing and retrofits. The SGK Brand solutions segment provides brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services for the consumer goods and retail industries. The company was founded in 1850 and is based in Pittsburgh, Pennsylvania.