StoneMor Partners is a provider of funeral and cemetery products and services in the death care industry. Co.'s cemetery products and services include: interment rights, which consist of burial lots, lawn crypts, mausoleum crypts, cremation niches, and perpetual care rights; merchandise, which consists of burial vaults, caskets, grave markers and grave marker bases, and memorials; and services, which consist of installation of burial vaults, installation of caskets, installation of other cemetery merchandise, and other service items. As of Dec 31 2013, Co. operated 277 cemeteries in 27 states and Puerto Rico, and also owned and operated 90 funeral homes in 18 states and Puerto Rico.
STON's economic moat is derived from its unique assets of funeral homes and cemetaries. The scope and scale give direction and succession opportunities for a very fragmented industry. Aging population trends make STON's value proposition and business model relevant for years to come.
StoneMor Partners concluded 2014 with record revenue results. Momentum continues to head in the right direction for the cemetery operator. The company seems poised to build on its already expanding funeral home business. he new insurance division provides great upside. Management intends to continue growing its quarterly distribution. After raising the lofty payout twice last year, StoneMor plans to pay an equal amount of attention to the advance of its dividend in 2015. STON is still a few years away from being able to report annual profits. That said, an effort to expand into the insurance market is a solid opportunity for STON, and could increase long-term growth potential
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Locations of funeral homes and cemetaries is a competitive advantage. Most municipalities are not jumping at the bit to open land for new cemetary usage.
Acheiving and sustaining profitability. Even with solid revenue growth STON still operates at a loss.
Mistakes in execution
Missteps in implementing insurance division
Aging American population
Prearranged funerals take burden off families
Insurance offerings fit well into the need set of this target market. Great potential for sales success.
Strategic acquisitions to continue to consolidate a very fragmented industry.
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