$600 MILLION FOR SHAREHOLDERS: SCI Buys Back Stock While Operating Income Falls

# $600 MILLION FOR SHAREHOLDERS: SCI Buys Back Stock While Operating Income Falls

*Service Corporation International authorized $600 million in share repurchases in June. The company carries $5.16 billion in debt. Net income is declining. Interest costs are rising.*

On June 11, 2026, the board of directors of Service Corporation International (NYSE: SCI) voted to increase the company's share repurchase authorization by approximately $472 million. Combined with roughly $128 million remaining under the existing program, the authorization now totals $600 million. SCI announced the increase in a one-page press release filed as Exhibit 99.1 to an 8-K with the Securities and Exchange Commission.

The announcement came one month after SCI reported first-quarter financials that showed revenue growth but declining profitability. It also came against a balance sheet carrying $5.16 billion in total debt.

What SCI Said

The June 11 press release is brief. It announces the increased repurchase authorization and provides the standard cautionary language about forward-looking statements. It notes that SCI served approximately 700,000 families in the trailing year, operated 1,487 funeral service locations and 503 cemeteries as of March 31, 2026, and covers 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico.

The press release does not explain why the board chose this moment to expand the buyback. It does not reference the declining operating income or rising interest costs in the most recent quarter. It does not address the relationship between the $600 million authorization and the company's $5.16 billion debt load.

The Numbers the Press Release Did Not Mention

SCI's Q1 2026 10-Q, filed April 30, tells the fuller story.

Revenue grew 2.1% year over year, from $1.07 billion to $1.10 billion. But operating income fell 3.1%, from $251.7 million to $243.8 million. Net income dropped 4.9%, from $142.9 million to $135.8 million.

Interest expense rose 4.1% in the same period, from $61.5 million to $64.0 million. SCI now spends 26 cents of every dollar of operating income on interest payments. That ratio is moving in the wrong direction. Operating income is shrinking. Interest costs are growing.

The company's total debt stood at $5.16 billion at March 31, 2026, essentially flat with $5.14 billion at year-end 2025. Stockholders' equity was $1.58 billion. The resulting debt-to-equity ratio of 3.26x means that for every dollar of shareholder equity, SCI carries $3.26 in debt.

How the Buyback Works

A share repurchase authorization gives the company permission to buy its own stock on the open market, up to the authorized dollar amount. SCI can spend the full $600 million or stop at any time. There is no fixed deadline.

SCI has been using its authorizations aggressively. In Q1 2026, the company repurchased 1,789,293 shares for $144.4 million at an average price of $80.69 per share. After those purchases, $215.1 million remained under the prior authorization. Between March 31 and late April, SCI bought back another 184,422 shares for $15.3 million.

At the Q1 pace of roughly $144 million per quarter, the $600 million authorization would be exhausted in approximately four quarters. At SCI's recent average purchase price of $80.69, $600 million buys approximately 7.4 million shares, or about 5.4% of the 137.9 million shares outstanding as of April 30, 2026.

The Share Count Tells the Story

SCI's share count has been shrinking steadily:

Over 15 months, SCI retired approximately 6.6 million shares, a 4.6% reduction.

Why This Matters

The buyback serves a purpose that becomes visible when you compare net income to earnings per share. SCI's net income fell 4.9% in Q1 2026. But basic EPS only dropped from $0.99 to $0.98, a decline of 1%. Fewer shares outstanding means each share gets a slightly larger slice of a smaller pie. The arithmetic of the buyback absorbs about three-quarters of the earnings decline.

Share buybacks among S&P 500 companies exceeded $900 billion in 2025, a record. SCI's program fits that pattern. But SCI carries $5.16 billion in debt, a debt-to-equity ratio above 3x, rising interest costs, and declining operating income. The board chose to authorize $600 million for share repurchases in that environment.

The Profit Question

SCI generated $542.6 million in net income in 2025 from approximately 700,000 families. That works out to roughly $775 in profit per family served. The company does not disclose per-family margins by service line, so that figure blends direct cremations, full traditional funerals, cemetery plots, preneed contracts, and everything else.

The $600 million buyback authorization equals more than one full year of net income. It represents approximately $857 for each of the 700,000 families SCI served in 2025. It represents 11.6% of the company's total debt.

None of this is illegal. Share repurchase programs are standard practice for public companies. SCI's board has a fiduciary duty to shareholders, and buybacks are one mechanism for returning capital to them.

But the question of where the money goes is relevant in an industry where families are paying at the worst moments of their lives. The same Q1 10-Q that shows declining profitability also shows SCI spending $144 million in a single quarter buying its own stock. That is a choice the board made about how to allocate capital. Families paying for funerals are the source of that capital.

SCI reported $4.31 billion in revenue in 2025. The company's preneed trust funds hold $5.71 billion in deferred receipts from families who paid in advance. SCI controls 1,487 funeral homes and 503 cemeteries across North America. It is the largest deathcare provider on the continent. When it decides to spend $600 million buying its own stock instead of paying down debt or reducing prices, that decision flows from the revenue generated by those 700,000 families.

How Families Can Reduce What They Pay

Families concerned about cost have alternatives to the full-service funeral home model:

• Direct cremation from an independent provider: $1,000 to $2,500, compared to the NFDA's 2025 median funeral cost of $8,069 for a traditional burial.
• Body donation to medical science programs: typically includes free cremation and return of remains at no cost.
• Green burial at a conservation or natural burial ground: $1,500 to $4,000, without embalming, casket, or vault.
• Veterans benefits: The VA provides burial in a national cemetery, a grave marker, and a burial flag at no cost for eligible veterans. Some families pay nothing.
• Scattering or home storage of cremated remains: no cost beyond the cremation itself.

The FTC Funeral Rule requires funeral homes to provide a General Price List (GPL) upon request. Families can ask for the GPL by phone before visiting. Comparing prices across providers is the single most effective way to reduce cost. SCI's own Dignity Memorial locations are required to comply with the Funeral Rule like every other provider.

*Sources: Service Corporation International, Form 8-K filed June 12, 2026, Exhibit 99.1 (share repurchase authorization announcement); Service Corporation International, Form 10-Q for the quarterly period ended March 31, 2026 (filed April 30, 2026); SEC XBRL company financial data, CIK 0000089089; NFDA General Price List Survey, 2025.*