Park Lawn Corporation (TSX:PLC) stock has climbed 9.3% over the past week as of early afternoon trading on April 1. Shares have increased 19.2% in 2019 so far. The company released its fourth-quarter and year-end results for 2018 on March 26.
Net earnings in 2018 grew to $6.72 million compared to $4.19 million in the prior year. Adjusted net earnings increased 15.4% year-over-year to $15.9 million or $0.77 per share, which represents a 20.1% increase from the prior year. The company announced a monthly dividend of $0.038 per share which represents a modest 1.6% yield.
Park Lawn committed to an aggressive strategy in 2018, and states that it will continue this path into 2022. It spent approximately $275 million on strategic acquisitions, leveraging its strong cash position.
This is in sharp contrast to some of its largest competitors who have struggled with liquidity. PLC also increased its credit facility to $225 million compared to $150 million in the prior year.
PLC is well-positioned to post steady growth on the back of this strategy, as well as increased demand for its services. An aging population in North America means that there will be a greater need for memorialization services going forward.
The stock boasts an RSI of 72 as of this writing, which puts it in overbought territory. Value investors may want to want for a pullback to a more favourable price level before pulling the trigger.
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