Every 217 seconds, an Australian dies. And according to a Financial Review interview with the CEO of Invocare (ASX: IVC), Oz's largest funeral company, cremation is an increasingly popular option.
In the interview, Chief Executive Andrew Smith noted that there's currently a clean split between cremations and traditional burials, but that cremation has been making major gains in recent years. The reason? Cold, hard cash.
While a basic cremation costs around $650, a burial costs around $9,000. On the higher end, your loved ones are looking at $3,500 to $5,000 for a classy cremation, while a burial crypt can cost up to $250,000. As Australia (and the world) continues to urbanize at increasing rates, expensive land costs could put an even greater squeeze on burial bills.
Foolish takeaway
Burials are about more than business – but for Invocare, they're mostly about, well, business. A fair weather winter can improve longevity (a nice way of saying "cut down on elderly influenza deaths"), but long-term investors should look beyond a slow season for the Grim Reaper.
Benjamin Franklin may have helped to found the United States, but his greatest insight most likely came in a 1789 letter when he wrote, "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."
Australian death rates are expected to rise another 15,000 per year from current levels of 145,000, and whether it's a cremation or burial, Invocare will keep getting calls. For investors willing to wait out the long-term, Invocare may be the most depressingly sustainable profit your portfolio will ever pull.
Don't want to bet your dollars on others biting the dust? Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."
More reading
- Invocare reports steady growth and more future expansion
- Is your portfolio ready for the aging population?
Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.
