The low-speculative-grade rating on Houston, Texas-based Carriage Services Inc. reflects its weak business risk profile because of the company's narrow focus in the highly fragmented death-care industry, which is susceptible to adverse changes in mortality rates. These factors are only partly mitigated by the long-term predictability of the funeral home and cemetery business. The rating also reflects the company's highly leveraged financial position, which supports its aggressive financial policy. Carriage is only one-tenth the size of the largest death-care operator, Service Corp. International (BB/Stable/--). However, given a fragmented competitive field, consisting largely of small local operators, Carriage's network of 138 funeral homes in 25 states and 32 cemeteries in 11 states still makes the company the third-largest rated operator in
