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
NEW YORK (TheStreet) -- "The only certainties in life are death and taxes." Everyone's familiar with this old adage. Given the uncertainty of this economic recovery, wouldn't it be nice to have an investment just as reliable?
The good news is income investors can come pretty close to this and lock in predictable returns by owning stocks of companies that operate in these fields -- death and taxes.
|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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV