Canadian dollar tumbles fast (though not from particularly lofty heights to start with)

Briefing highlights

Canadian dollar tumbles fast
How funeral stocks are faring
Markets at a glance
Hydro One raises dividend
Canadian home sales, prices sink
Thomson Reuters to move an operation
Home Depot misses key estimate
Oil prices at multiyear high

Canadian dollar tumbles

The Canadian dollar is tumbling fast today, albeit from not particularly lofty heights, as the U.S. currency gains ground and trade-related headlines deal the loonie a blow.

The loonie is now at about 77.7 U.S. cents, having struggled early to top the 78-cent mark.

There are several issues knocking the currency down, said Mark McCormick, North American head of foreign exchange strategy at TD Securities.

Among them are rising U.S. Treasury yields and a strong American dollar, the sticking points in negotiations to overhaul the North American free-trade agreement, and the standing of Canada and its central bank compared to their peers.

When you look at Canada’s current account gap, you see that the country is spending more than it’s saving, Mr. McCormick said.

At the same time, higher interest rates challenge “how long the consumer can drive the growth story.”

But for the Bank of Canada, the era of “easy money” around the world is clearly ending, though Canada’s central bank so far has resisted moving its benchmark rate higher.

The death care industry

Funeral stocks – the financial kind, not inventory – are a mixed bag this year but Canada is firmly in the lead.

That’s a good thing if you’re a shareholder of Park Lawn Corp. Maybe not so good if you’re a recent client.

Park Lawn, the major Canadian publicly traded funeral services company, reports quarterly results after markets close Tuesday, which got me wondering how its peers were faring and what they were saying.

Even if you’re not an investor, such reports are always worth scanning for how they talk about a subject few want to talk about.

Here’s a look at the shares of three public companies over the past year:

Service Corp. International, which reported first-quarter results late last month, posted a revenue gain though a drop in profit from a year earlier. Stripping out the special items, however, brought earnings per share to 47 US cents from 38 US cents from a year earlier.

(Here’s where we get into some of that language thing: “About of half of this increase in adjusted earnings per share was attributable to improved operating performance in our funeral and cemetery operations driven by a strong flu season compared to prior year and effective cost management,” chief executive officer Tom Ryan said in unveiling the numbers.)

Carriage Services Inc., another big U.S. player, has seen its stock slip over the past year, though posted record first-quarter profit that was up 32.1 per cent from a year earlier, with a revenue gain of 7.7 per cent.

StoneMor Partners LP stock is, to put it bluntly, six feet under.

For its part, Park Lawn ended 2017 with an almost 30-per-cent jump in revenue. Profit fell, but on an adjusted basis climbed 75 per cent.

Then there are the casket makers, notably the Batesville unit of Hillenbrand, which is a more diversified U.S. company. Batesville’s in the business of caskets, urns and related products.

Batesville’s revenue rose 1 per cent from a year earlier in its second quarter, which was “primarily the result of higher burial volume driven by an increase in North American deaths, partially offset by lower sales of non-burial products.”

(One margin measure was lower “primarily driven by supply chain inefficiencies and cost inflation.” Even though Hillenbrand didn’t mean it this way, I nonetheless raised my eyebrows at supply chain.)

Matthews International, which provides coffins, cremation equipment and other products, also reported stronger revenue and profit in its second quarter. It, too, cited the “effects of a more severe flu season” on casket sales.

Look overseas, too, notably at Britain, where, according to the Financial Times, a price war has raged and where Dignity PLC has called for stronger regulation of its industry.

In first-quarter results posted Monday, Dignity reported a 2-per-cent jump in revenue, flat operating profit and a rise in the number of deaths. (Yes, that’s part of its report.)

“The absolute number of deaths increased by approximately 8 per cent to 181,000 from 167,000 in the comparative period last year,” Dignity said.

Bad news, this? “Historical data indicate that it is likely that this proportional increase will not continue throughout the remainder of the year.”

But on the other hand? “However, the group believes that it is now likely that the full year will record at least the same number of deaths as last year (590,000).

Dignity changed its pricing structure earlier this year, from its “simple funeral” to a test of its “full service offering” with the option of no limousines.

And a couple of lines from earlier reports from SCI and Carriage Services that you don’t want to read the wrong way:

SCI on the industry: “Barriers to entry exist, but primarily in the high-end market.”

Carriage Services: “We are more excited than ever about the industry landscape and the pipeline of high-quality candidates produced by our corporate development team.”

(With thanks to 2017’s Eat, Drink and Be Buried: A Gourmet Detective Mystery.)

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Hydro One boosts dividend

It may pale in comparison to the chief executive officer’s controversial pay package, but Hydro One Ltd. shareholders are getting a 50-per-cent dividend increase.

The utility is raising its quarterly payout to 23 cents a share, it said today as it posted a jump in first-quarter profit, to $222-million or 37 cents a share, from $167-million or 28 cents a year earlier. Revenue slipped to $1.58-billion from $1.66-billion.

The Ontario government, which owns 47 per cent of Hydro One, is angry over CEO Mayo Schmidt’s $6.2-million 2017 compensation, while Conservative leader Doug Ford has threatened to fire the board.

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Briefing highlights