Morningstar | Invocare's Ongoing Reinvestment Program Will Help it Capitalise on the Ageing Population
InvoCare is the Australian market leader in funeral services boasting a share of around one third. Its intangible brand assets, reputation, and scale are competitive advantages, and supportive of a wide economic moat. The number of deaths is highly predictable, creating a reliable revenue source. Historically, growth has been driven by price increases, growth in the number of deaths, small organic market share gains, and a boost from acquisitions of small private businesses at relatively low prices. Nonetheless, year-on-year variations in the death rate can cause some short-term earnings volatility. InvoCare typically trades on a high forward price/earnings ratio; however, we believe a premium valuation is justified, given the stable, growing revenue and returns consistently above its cost of capital.Invocare is a provider of services in the funeral industry in Australia, New Zealand and Singapore with smaller operations in Hong Kong and the U.S. Through its associate, Co. provides online memorial services to allow families and communities to celebrate the life of a loved one.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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