As of June 13, 2025, Service Corporation International's estimated intrinsic value ranges from $40.65 to $93.07 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $93.07 | +16.1% |
| Discounted Cash Flow (5Y) | $90.28 | +12.6% |
| Dividend Discount Model (Multi-Stage) | $52.78 | -34.1% |
| Dividend Discount Model (Stable) | $60.50 | -24.5% |
| Earnings Power Value | $40.65 | -49.3% |
Is Service Corporation International (SCI) undervalued or overvalued?
With the current market price at $80.15, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Service Corporation International's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.63 | 0.75 |
| Cost of equity | 6.8% | 9.1% |
| Cost of debt | 4.6% | 5.3% |
| Tax rate | 23.2% | 23.6% |
| Debt/Equity ratio | 0.43 | 0.43 |
| After-tax WACC | 5.8% | 7.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $90 | $17,451M | 80.1% |
| 10-Year Growth | $93 | $17,848M | 63.8% |
| 5-Year EBITDA | $72 | $14,868M | 76.6% |
| 10-Year EBITDA | $78 | $15,762M | 59.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $681M |
| Discount Rate (WACC) | 7.6% - 5.8% |
| Enterprise Value | $9,008M - $11,762M |
| Net Debt | $4,599M |
| Equity Value | $4,409M - $7,163M |
| Outstanding Shares | 142M |
| Fair Value | $31 - $50 |
| Selected Fair Value | $40.65 |
| Metric | Value |
|---|---|
| Market Capitalization | $11410M |
| Enterprise Value | $16009M |
| Trailing P/E | 21.52 |
| Forward P/E | 21.34 |
| Trailing EV/EBITDA | 10.80 |
| Current Dividend Yield | 156.31% |
| Dividend Growth Rate (5Y) | 6.12% |
| Debt-to-Equity Ratio | 0.43 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $27.92 |
| Discounted Cash Flow (5Y) | 25% | $22.57 |
| Dividend Discount Model (Multi-Stage) | 20% | $10.56 |
| Dividend Discount Model (Stable) | 15% | $9.08 |
| Earnings Power Value | 10% | $4.06 |
| Weighted Average | 100% | $74.19 |
Based on our comprehensive valuation analysis, Service Corporation International's weighted average intrinsic value is $74.19, which is approximately 7.4% below the current market price of $80.15.
Key investment considerations:
Given these factors, we believe Service Corporation International is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.