The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Lisa Springer
|As the death rate rises to a projected 9.7 deaths per 1,000 Americans in the next 20 years, companies in the death-care industries -- such as Hillenbrand and Stonemor Partners -- can make good investments.|
Hillenbrand is a major player in the death-care industry. The company's subsidiary, Bateville Casket, is the world's largest maker of caskets, holding a nearly 50% share of the market. Hillenbrand re-invests reliable cash flow generated by its casket segment in its fast-growing process-equipment businesses. This includes K-Tron, which makes conveyer equipment; Rotex, a maker of sifters and separation equipment; and the Size Reduction Group, which makes crushers that process 75% of all the coal produced in the United States. Hillenbrand was spun off from its former parent Hill-Rom (HRC) in 2008, so it has a short history as a public company, though Batesville has been making caskets for more than 100 years. In the past five years, Hillenbrand has grown sales by 9% a year and increased earnings at a 5% annual rate. Last year, the company easily beat analyst estimates by delivering $883.4 million in revenue, an 18% increase from 2010. Its $106.1 million in earnings was a 15% improvement from the year-ago period. Hillenbrand expects 13% to 17% revenue growth this year, which will likely be fueled by double-digit growth in the process-equipment segment. Earnings growth is expected to be flat this year due to the absence of one-time items that boosted the company's income statement last year.