One thing scarier than a graveyard? The high cost of burials

That's why many Australians are opting for cremation.

Justin Loiseau

Justin Loiseau hails from the great united state of North Carolina, where he started his first business at the ripe age of five: melting crayons into candles. With the infamous Crayola Crash of 1994, Justin moved on to study economics and environmental studies as a Morehead-Cain Scholar at the University of North Carolina. He has worked in a variety of sectors across the globe, from management consulting to the United Nations, and once spent three months examining invasive snails in Vietnam. Justin discovered The Motley Fool in 2012 and it’s been love ever since. Creativity, contrarianism, kerfuffling… what more could one want? When he’s not playing the Fool, you can find Justin at the University of Auckland, where he is pursuing a Masters in Economics as a Rotary Ambassadorial Scholar. Justin finds biogas digesters fascinating and can unicycle a mile in seven minutes.

Published September 4, 2013 5:07 pm AEST

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.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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