Park Lawn Corp (PLC.TO) Buy, Sell or Hold

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Park Lawn Corp (PLC.TO)

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26.48

-0.01 (0.04%)

as of Aug 12, 2024, 8:00:00 pm Market Open.

112 watching

STRONG BUY

Great company, industry, and management team. Enormous tailwinds from aging demographics. #2 player in North America, but still has only 2% of the market, which is hugely fragmented. Consolidating and growing organically. Very compelling valuation. Growing faster than SCI, which has 20% of the market. Great long-term hold.

DON'T BUY

Even though it has sold off and its PE is lower now at 10x and the balance sheet is good, the problem is its still pricey at 22x and growing at only 8%. A good name, but doesn't love it.

DON'T BUY

Death and taxes are inevitable in life, so why not invest in funeral homes? But every time he looks at PLC they are buying more properties and running it debt--which is too high for him

COMMENT

It has had issues but earnings are more stable.

COMMENT

Editor's Note - The question was his preference over PLC and ATZ. PLC has had issues but earnings are more stable. ATZ is still a bit pricey. He likes it on valuation to growth but PLC is the better buy for the next year.

HOLD

Large increase in share price unaccounted for.
Long term prospects for sector strong.
Management team will need to manage business prudently.

PAST TOP PICK

(A Top Pick Aug 19/22, Down 2%)

12 acquisitions in the last year, and that's one of the knocks against it. With higher interest rates, they'll have to pay more for funding. He sees the acquisitions being accretive to the story. Performing well. Not too late to add here.

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99+ opinions with 4.15 rating.

TOP PICK

Stockchaser Trevor Rose stresses that PLC is enjoying growth through acquisition, closing three in the last quarter of 2022 alone. Its Q3 2022 report announced last November a year-over-year increase in net revenues by 10.7%, greatly helped by these acquired operations. Management has a history of being disciplined and it offered positive guidance. Aging demographics are another tailwind, cash flows are strong, and barriers to entry remain high, so Park Lawn enjoys a moat. However, net margins shrank from 9.8% to 6.6% from Q3-2021 to Q3-2022, attributed to the pandemic. Park Lawn pays a modest dividend of 1.7%, which is safe at a payout ratio of 46.53%. Overall, this is a buy.

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Profitability improved. Acquisitive pipeline in motion. Attractive valuation and improved payout ratio. Shares have gained >75% since pandemic low. Unlock Premium - Try 5i Free

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. PLC closed three acquisitions this quarter. Coverage and leverage ratios looking good. EPS grew over 21% compared to 2Q20. Margin goal of 26% by 2022 achievable.

BUY

They have owned it for a long time. It is the second largest holder of funeral homes and cemeteries in North America. It has good tailwinds, a long runway and is well managed. It is consolidating the industry which is very fragmented in the U.S. and is focused on improving their margins. Buy and hold for a long time.

BUY

He has a $33 price target and a sector out-perform on this stock. The third quarter beat on revenue, EBITA, etc. and they provided good guidance. They are a good steward of capital.

COMMENT

It needs a 3 to 5 year time horizon. The management team and underlying corporation profile have done well with acquisitions. It is a smaller cap company and institutions are buying larger caps in this market.

TOP PICK

Has high margins and there are high barriers to entry for others. Also has high demographic tailwinds behind it. Has a good management team with an M&A strategy as well as organic growth. Is guiding to $150 million EBITA by 2026. Joined the TSX last fall. Buy 7, Hold 1, Sell 0. (Analysts’ price target is $36.31)

PAST TOP PICK

(A Top Pick Nov 12/21, Down 40%) Did well through pandemic, and then things dried up last quarter, which hit the stock. Very stable over the long term. If you have a viewpoint longer than 6 months, this is a terrific time to be adding. Great management, good reputation. Acquisitions will continue to add value.

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Park Lawn Corp (PLC.TO)