NEW YORK -- Death and taxes, the saying goes, are the only certainties in life. If so, funeral companies like Houston's Service Corporation International might look like a sure bet to investors.

This slow but steady business is fueled by the aging U.S. population: By 2030, the proportion of the population over 65 will reach 21%, up from 15% in 2020, according to the Census Bureau.

Service Corporation International and its competitor Carriage Services have both seen their income grow over the past ten years. Industry consolidation has empowered them to command higher prices in a market still dominated by private and family-owned businesses. Despite inflationary pressures, profit margins have stayed relatively stable.

The National Funeral Directors Association predicts that the industry's revenue will expand at an annual rate of 1.2%, reaching $20.2 billion by 2029.

The cost of funerals rose 5.1% in 2023, based on inflation data from the consumer price index. This comes after a 3.3% increase in 2022. While overall inflation has eased, the factors contributing to these significant price jumps, like changes in demographics, are likely to keep pushing prices upward. We can expect these increases in service and material costs to continue.

The median cost of a funeral with burial reached $8,300 in 2023, an increase from $7,848 in 2021, according to the National Funeral Directors Association. The median cost of a funeral with cremation was $6,280 in 2023, up from $5,810 in 2021.

Consumers are overwhelmingly opting for the more budget-friendly option for their final arrangements: The cremation rate reached 60.5% in 2023, compared to a burial rate of 34.5%, according to the National Funeral Directors Association.

Service Corporation International is by far the larger publicly-traded funeral company, boasting 1,490 funeral homes and 492 cemeteries across the nation. Carriage Services, also headquartered in Houston and operating nationwide, has 164 funeral homes and 31 cemeteries.

Carriage Services is exploring further price adjustments throughout 2024.

“We can’t simply implement a 10% increase across the board, so we've been making gradual adjustments because we need to balance the price increase with the volume,” said Carlos Quezada, CEO of Carriage Services, in a conference call with analysts following its latest earnings results. “We don’t want to lose volume and lose our competitiveness.”

Carriage Services exceeded Wall Street estimates with increased earnings and revenue in the second quarter, while maintaining a relatively steady net profit margin of just under 6%. The stock price has surged by 30% this year, significantly outperforming the broader S & P 500 index.

Service Corporation International reported a slight decrease in second-quarter profits that fell short of analysts' expectations, although the company still projects overall earnings growth for the year. They anticipate that prepaid funeral services, alongside acquisitions, will fuel this growth. The company's stock has climbed 14% this year, performing closer to the gains seen in the broader market.