How to Make a Killing in the Death Business

One common theme is that even though there are fewer funerals, the average cost of the related services has increased around 4% throughout the industry.

It seems most people have yet to discover they can buy their caskets wholesale at Costco (COST Quote). As a result, people are paying more for such products and services.

The industry is also focusing on so-called pre-need contracts, paying up for services before they are actually needed. These proceeds go directly to the companies' bottom lines.

First up is Carriage Services (CSV Quote), shares of which have climbed more than 75% since this time last year.

Carriage Services reported its second-quarter results in August and its CEO, Melvin Payne, reported that revenue increased by 11% year over year to $41.7 million and earnings rose to 10 cents from 3 cents last year. The 16-year-old company, which is based in Houston, has 135 funeral homes in 27 states.

Carriage Services says it does not want to borrow money to make acquisitions but would rather use its own cash. It's looking in the Los Angeles area for buying opportunities. According to Yahoo! Finance, the $162 million market-cap company has $14 million in cash and more than $200 million in debt.

Next is StoneMor Partners(STON Quote), another small-cap company that reported second-quarter results last month. Revenue rose more than 43% to $40.7 million, and net income showed a 300%-plus rise -- $1.1 million to $4.7 million.