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1. Company Snapshot

1.a. Company Description

Park Lawn Corporation, together with its subsidiaries, provides deathcare products and services in Canada and the United States.The company primarily offers cemetery lots, crypts, niches, monuments, caskets, urns, and other merchandise, as well as funeral, after life celebration, cemetery, and cremation services.It owns and operates 135 cemeteries and 138 funeral homes, as well as crematoriums.


The company was founded in 1892 and is headquartered in Toronto, Canada.

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1.b. Last Insights on PLC

Positive drivers behind Park Lawn Corporation's recent developments include the successful completion of its going-private transaction with Homesteaders Life Company and Birch Hill Equity Partners. This transaction, which was approved by shareholders on July 29, 2024, and received final court approval on August 6, 2024, is expected to provide Park Lawn with increased financial flexibility and resources to pursue growth opportunities. Additionally, a recent valuation analysis estimated Park Lawn's fair value at CA$31.30, suggesting potential upside for the company.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Park Lawn Announces Completion of Going Private Transaction With Homesteaders Life Company and Birch Hill Equity Partners

Aug -09

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Park Lawn Receives Final Order Approving Arrangement With Homesteaders Life Company and Birch Hill Equity Partners

Aug -07

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Park Lawn Announces Shareholder Approval of Going Private Transaction

Jul -29

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Calculating The Fair Value Of Park Lawn Corporation (TSE:PLC)

Jul -11

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Park Lawn Announces Mailing of Meeting Materials and Receipt of Interim Order in Respect of Going Private Transaction

Jul -08

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Park Lawn Provides Update on Special Meeting in Connection with Going Private Transaction

Jun -18

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AM Best Places Credit Ratings of Homesteaders Life Company Under Review With Negative Implications

Jun -12

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Park Lawn Announces Going Private Transaction with Homesteaders Life Company and Birch Hill Equity Partners

Jun -03

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.80%)

6. Segments

Construction

Expected Growth: 7%

Park Lawn Corporation's 7% growth in Construction is driven by increasing demand for death care services, aging population, and strategic acquisitions. Additionally, investments in cemetery development and expansion into new markets contribute to growth. Furthermore, the company's focus on providing high-quality services and products, such as memorialization and interment rights, also supports revenue growth.

Services

Expected Growth: 6%

Park Lawn Corporation's 6% growth is driven by increasing demand for death care services, aging population, and strategic acquisitions. The company's diversified portfolio of funeral homes, cemeteries, and crematories provides a stable revenue stream. Additionally, investments in technology and digital platforms enhance customer experience, driving growth in pre-need sales and at-need services.

Trading

Expected Growth: 9%

Park Lawn Corporation's 9% growth is driven by increasing demand for death care services, strategic acquisitions, and expansion into new markets. The company's focus on providing high-quality funeral and cemetery services, coupled with its ability to integrate acquired businesses, has led to revenue growth and improved profitability.

Holding

Expected Growth: 5%

Park Lawn Corporation's 5% growth is driven by increasing demand for death care services, acquisitions of funeral homes and cemeteries, and expansion into new markets. Additionally, the company's focus on cost savings initiatives, investments in technology, and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Cemetery Properties

Park Lawn Corporation owns and operates a network of cemeteries, providing a peaceful and serene environment for families to pay their respects to their loved ones.

Funeral Homes

Park Lawn Corporation operates a chain of funeral homes, offering a range of funeral services, including traditional funerals, cremations, and memorial services.

Cremation Services

Park Lawn Corporation provides cremation services, offering a dignified and respectful way to say goodbye to loved ones.

Monuments and Memorials

Park Lawn Corporation designs and manufactures monuments and memorials, providing a lasting tribute to loved ones.

Pre-Planning Services

Park Lawn Corporation offers pre-planning services, allowing individuals to plan and prepare for their funeral and cemetery arrangements in advance.

8. Park Lawn Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Park Lawn Corporation operates in the death care industry, which has few substitutes. However, the rise of cremation and alternative death care options poses a moderate threat to the company's traditional funeral home and cemetery services.

Bargaining Power Of Customers

Park Lawn Corporation's customers are typically individuals and families who are experiencing a loss. They have limited bargaining power, as they are often in a vulnerable state and may not be in a position to negotiate prices or services.

Bargaining Power Of Suppliers

Park Lawn Corporation relies on suppliers for goods and services such as caskets, embalming fluids, and other funeral supplies. While the company has some bargaining power due to its size, suppliers may still have some leverage in negotiations.

Threat Of New Entrants

The death care industry has high barriers to entry, including regulatory requirements and significant capital expenditures. This makes it difficult for new entrants to enter the market, reducing the threat of new competition to Park Lawn Corporation.

Intensity Of Rivalry

The death care industry is highly competitive, with many established players competing for market share. Park Lawn Corporation faces intense rivalry from other funeral home and cemetery operators, which can lead to pricing pressure and competition for customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.48%
Debt Cost 8.70%
Equity Weight 70.52%
Equity Cost 9.92%
WACC 9.56%
Leverage 41.80%

11. Quality Control: Park Lawn Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Carriage Services

A-Score: 6.0/10

Value: 5.0

Growth: 5.9

Quality: 5.4

Yield: 2.0

Momentum: 9.0

Volatility: 8.3

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Rollins

A-Score: 5.8/10

Value: 0.7

Growth: 7.1

Quality: 7.5

Yield: 2.0

Momentum: 7.5

Volatility: 9.7

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Regis

A-Score: 4.7/10

Value: 8.1

Growth: 5.1

Quality: 6.2

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

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Mister Car Wash

A-Score: 4.2/10

Value: 4.3

Growth: 7.4

Quality: 5.3

Yield: 0.0

Momentum: 3.0

Volatility: 5.3

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Medifast

A-Score: 4.1/10

Value: 7.6

Growth: 2.1

Quality: 5.6

Yield: 3.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Park Lawn

A-Score: 3.7/10

Value: 5.6

Growth: 4.3

Quality: 4.4

Yield: 1.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.48$

Current Price

26.48$

Potential

-0.00%

Expected Cash-Flows