Critical Survey: Carriage Services (NYSE:CSV) & Frontdoor (NASDAQ:FTDR)

Frontdoor (NASDAQ:FTDR) and Carriage Services (NYSE:CSV) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Institutional and Insider Ownership

66.5% of Carriage Services shares are held by institutional investors. 1.6% of Frontdoor shares are held by company insiders. Comparatively, 2.7% of Carriage Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Frontdoor and Carriage Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	0	2	5	0	2.71
Carriage Services	1	1	3	0	2.40

Frontdoor presently has a consensus price target of $99.80, suggesting a potential upside of 1.10%. Carriage Services has a consensus price target of $52.57, suggesting a potential upside of 80.56%. Given Carriage Services’ higher probable upside, analysts plainly believe Carriage Services is more favorable than Frontdoor.

Volatility & Risk

Frontdoor has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, Carriage Services has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Valuation & Earnings

This table compares Frontdoor and Carriage Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$2.09 billion	3.25	$255.00 million	$4.00	24.68
Carriage Services	$417.44 million	1.11	$51.51 million	$2.94	9.90

Frontdoor has higher revenue and earnings than Carriage Services. Carriage Services is trading at a lower price-to-earnings ratio than Frontdoor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Frontdoor and Carriage Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.72%	120.90%	14.86%
Carriage Services	11.31%	17.81%	3.51%

Summary

Frontdoor beats Carriage Services on 11 of the 14 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

About Carriage Services

Carriage Services, Inc. provides funeral and cemetery services, and merchandise in the United States. It operates in two segments, Funeral Home Operations and Cemetery Operations. The Funeral Home Operations segment provides consultation services; funeral home facilities for visitation and memorial services; transportation services; removal and preparation of remains; sale of caskets and urns; cremation services; and related funeral merchandise. The Cemetery Operations segment sells interment rights for grave sites, lawn crypts, mausoleum spaces, and niches; related cemetery merchandise, including memorial markers, outer burial containers, and monuments; and interments, inurnments, and installation of cemetery merchandise services. Carriage Services, Inc. was founded in 1991 and is based in Houston, Texas.