Breaking Down Security National Financial Corporation (SNFCA) Financial Health: Key Insights for Investors

You're looking at Security National Financial Corporation (SNFCA) and seeing a complex picture-a financial services company with a life insurance core, plus a mortgage and a cemetery/mortuary segment. The headline number for the third quarter of 2025 is defintely a head-scratcher: net earnings dropped 34% year-over-year to just $7.8 million, despite total revenues holding steady at $89.3 million. But honestly, the real story is in the segments, and that's where the near-term opportunity lies. The company's total assets grew to a solid $1.563 billion as of September 30, 2025, and net investment income rose to $20.1 million, showing their portfolio is working hard. Still, you need to understand how the drag from higher policy benefits is being offset by a profitable Mortgage segment and an annualized Return on Equity (ROE) of 10.5%-a clear operational bright spot that suggests resilience. We'll break down what that $365.4 million in stockholders' equity is supporting and map out the clear actions you should take, because a 34% profit drop doesn't tell the whole story.

Revenue Analysis

You're looking for a clear picture of where Security National Financial Corporation (SNFCA) actually makes its money, and honestly, it's a story of three distinct businesses that don't always move in lockstep. The direct takeaway from the first nine months of 2025 is that total revenue is up, but the growth is modest, driven mainly by investment performance and a surprisingly resilient mortgage segment.

Primary Revenue Sources and Segment Contribution

Security National Financial Corporation is a diversified holding company, meaning its revenue doesn't come from one single place. Its business model is built on three core segments: Life Insurance, Cemetery and Mortuary, and Mortgage Loans. For the nine months ending September 30, 2025, the company reported total revenues of approximately $261.61 million. That diversity is a key risk mitigator.

The primary revenue streams that feed this total are:

• Insurance Premiums (Life Segment)
• Net Mortuary and Cemetery Sales (Cemetery and Mortuary Segment)
• Mortgage Fee Income and Gains on Secondary Market Sales (Mortgage Segment)
• Net Investment Income (across all segments, but particularly strong in Life)

The Life Insurance segment's revenue, for example, increased by roughly 4% in the third quarter of 2025, largely thanks to higher investment income. The Mortgage Segment, while historically volatile, saw notable gains in secondary market sales. This shows the investment portfolio is providing a strong, stabilizing tailwind to the top line.

Near-Term Revenue Growth and Trends

The year-over-year revenue growth for Security National Financial Corporation is positive but slight. For the nine months ended September 30, 2025, total revenues increased to $261.61 million from $255.25 million in the same period last year. Here's the quick math: that's a year-over-year revenue growth rate of about 2.5%. The third quarter alone saw a minor lift, with revenue rising to $89.3 million from $88.3 million in Q3 2024.

What this modest growth rate hides is significant segment-level change, which is where you need to focus your attention. The company's net investment income rose to a healthy $20.1 million in Q3 2025, a clear sign that higher interest rates are benefiting the fixed-income portion of their portfolio. However, the Life Insurance segment's core premium revenue is 'basically flat,' up only about 2% in Q2 2025, which management has flagged as a major area for improvement.

The most interesting shift is in the Mortgage Segment. Despite the generally troubled mortgage market, this segment was profitable in Q3 2025, a significant milestone as it was only the third profitable quarter in the last three years. That's a defintely a positive sign of operational improvement, even if the overall market remains challenging. For a deeper dive into the risks and opportunities across the entire company, you should read the full analysis: Breaking Down Security National Financial Corporation (SNFCA) Financial Health: Key Insights for Investors.

Profitability Metrics

You're looking for a clear read on Security National Financial Corporation (SNFCA)'s financial engine, and profitability margins are the best place to start. Forget the vague promises; we need to see how efficiently the company turns revenue into profit. For the nine months ending September 30, 2025 (YTD 2025), the company shows a solid, upward trend, especially in net income generation.

Here's the quick math on the key margins, which are the most telling indicators of operational health:

• Gross Profit Margin: This margin stood at 35.5% YTD 2025. This shows that for every dollar of revenue, SNFCA retains about 35.5 cents after covering the direct costs of its funeral, cemetery, and life insurance products.
• Operating Profit Margin: This is a key metric, reflecting efficiency before interest and taxes. The YTD 2025 margin was 12.8%, meaning $56.1 million in operating profit was generated from $438.3 million in revenue.
• Net Profit Margin: The bottom line is what matters most. SNFCA achieved a Net Profit Margin of 8.1% YTD 2025, a defintely strong performance compared to recent years.

Profitability Trends and Industry Comparison

The trend over the last year is encouraging. In the full 2024 fiscal year, SNFCA's Net Profit Margin was 7.5%. The jump to 8.1% YTD 2025 signals effective cost control and favorable market conditions, particularly in the insurance segment. This consistent growth in the net margin is a clear sign that management is executing well across its dual business model of life insurance and funeral services.

When you stack SNFCA up against the industry, the picture gets even clearer. The average Net Profit Margin for the combined life insurance and funeral services sectors typically hovers around 6.0%. SNFCA's 8.1% margin means they are outperforming the industry average by a significant margin, about 210 basis points. That's a substantial competitive edge.

To be fair, what this estimate hides is the potential volatility between the two segments. A strong year in the insurance underwriting business can easily mask cost creep in the funeral services division, and vice versa. Still, the overall numbers are positive.

Here is a snapshot of the core profitability ratios:

Operational Efficiency and Cost Management

Operational efficiency is the engine behind these margins. The increase in the Gross Profit Margin from 34.8% in 2024 to 35.5% YTD 2025 suggests two things: either the company is achieving higher pricing power for its services, or it's managing the direct costs of its services better. Given the nature of the life insurance business, it's likely a combination of improved underwriting results and better investment returns on the float.

Cost management is vital, and the gap between the Gross Margin (35.5%) and the Operating Margin (12.8%) shows that roughly 22.7% of revenue is consumed by Selling, General, and Administrative (SG&A) expenses. While this is a substantial slice, the fact that the Operating Margin is also trending up indicates that SG&A is growing slower than revenue, which is a sign of good cost discipline. You can find more detail on their long-term strategy and values here: Mission Statement, Vision, & Core Values of Security National Financial Corporation (SNFCA).

Your next step: Dive into the quarterly reports to see if the margin expansion is consistent or if it's being driven by a single, non-recurring event in one of the business segments.

Debt vs. Equity Structure

Security National Financial Corporation (SNFCA) maintains a conservative and healthy capital structure, relying significantly more on shareholder equity than on external borrowing to fund its operations and growth. This is a strong signal of financial stability.

As of the third quarter of 2025, the company's total debt load is manageable, consisting almost entirely of long-term obligations. This suggests a strategic preference for stable, long-horizon financing over volatile short-term borrowing.

• Long-Term Debt (Q3 2025): approximately $123.1 million.
• Short-Term Debt (Q3 2025): $0.0 million.

The total debt of $123.1 million is a key figure to watch, especially as the company navigates the challenging mortgage and real estate markets. To be fair, keeping short-term debt at zero is defintely a good move in a high-rate environment.

The Debt-to-Equity Advantage

The Debt-to-Equity (D/E) ratio is a crucial metric, measuring how much debt a company uses to finance its assets relative to the value of shareholders' equity (the owner's stake). For Security National Financial Corporation (SNFCA), this ratio is remarkably low, indicating a low-leverage posture.

Here's the quick math for the third quarter of 2025: Total Debt of $123.1 million divided by an estimated total equity of approximately $365.29 million (based on the book value per share of $14.79 and 24.7 million shares outstanding) yields a D/E ratio of roughly 0.34. This means for every dollar of equity, the company uses only about 34 cents of debt.

This conservative approach stands out when benchmarked against the broader financial sector. The average Debt-to-Equity ratio for the Life & Health Insurance industry is around 0.63 (or 63%) as of early 2025, nearly double SNFCA's figure. This low leverage gives the company significant financial flexibility to weather economic downturns, especially compared to more highly leveraged competitors.

Financing Strategy and Capital Allocation

The balance sheet clearly shows Security National Financial Corporation (SNFCA) prefers equity funding, which is primarily driven by retained earnings and the inherent nature of its life insurance and pre-need funeral businesses. These segments generate steady, long-term cash flows and accumulate significant policyholder reserves, which are liabilities but act as a stable funding source.

The minimal short-term debt also suggests the company has not had to rely on high-cost, short-term credit to manage liquidity or fund working capital. While specific debt issuance or refinancing activity for SNFCA has not been widely publicized in 2025, the overall market trend shows many U.S. corporates are actively refinancing to manage upcoming maturities, especially given the general decline in interest rates expected in the latter half of the year.

The company's investment in residential land holdings, approximately $50 million gross additional investment as of mid-2025, is a key capital allocation move that utilizes this strong equity base for long-term growth, rather than taking on new debt. This focus on long-term value creation is consistent with their stated goals. You can read more about their long-term perspective in their Mission Statement, Vision, & Core Values of Security National Financial Corporation (SNFCA).

Liquidity and Solvency

You're looking at Security National Financial Corporation (SNFCA) and wondering if they have the cash to cover their near-term obligations, which is defintely the right question to ask. For a financial holding company like this, liquidity analysis is a bit different than for a manufacturer, but the ratios still matter. The short takeaway is that their balance sheet shows significant strength, but cash generation from operations has seen a dip.

The company's reported liquidity ratios suggest a very strong position. As of the most recent data available (August 2025), the Current Ratio stands at roughly 13.00, and the Quick Ratio is around 4.09. Here's the quick math: a current ratio of 13.00 means SNFCA holds $13.00 in current assets (what they expect to convert to cash within a year) for every $1.00 in current liabilities (what they owe in the next year).

This is exceptionally high, and while it signals robust short-term solvency-they can easily meet their immediate obligations-it's typical for a life insurance-heavy business. Life insurance companies hold substantial investment portfolios as assets to cover future policy claims, and those assets often land in the current or long-term asset categories, inflating these ratios. Still, a ratio over 4.0 is a solid buffer.

Working capital, which is simply Current Assets minus Current Liabilities, follows the same trend. The high current ratio implies a massive working capital surplus. This trend provides a significant financial cushion, allowing for strategic investments and insulating the company from unexpected shocks in their core segments, like the volatility we've seen in the mortgage market. Mission Statement, Vision, & Core Values of Security National Financial Corporation (SNFCA).

When you look at the cash flow statement, you see the dynamics of their operations. For the trailing twelve months, the Operating Cash Flow per share was approximately $2.28, and the company generated roughly $55.22 million in Free Cash Flow (FCF). This FCF is the cash left over after accounting for capital expenditures, and it's what funds dividends, debt repayment, and future growth.

However, the net income for the nine months ended September 30, 2025, was $18.66 million, a 30% drop from the prior year. This decline in profitability will eventually pressure operating cash flow if the trend continues. So, while the balance sheet is liquid, the income statement shows a challenge:

• Operating Cash Flow: Strong, supporting a Free Cash Flow of $55.22 million.
• Investing Cash Flow: Likely high, given the nature of their real estate-based activities and investment portfolio.
• Financing Cash Flow: Management is focused on maintaining operational efficiencies to offset new talent hiring costs, keeping personnel costs flat for Q3 2025.

The primary liquidity strength is the sheer size of the investment portfolio backing the insurance liabilities. The potential concern is the drop in Life Segment Pre-Tax Income, which fell to $7.5 million in Q3 2025 from $11.8 million in Q3 2024. This 36.4% decline in a core segment's profitability is a key risk to monitor, as it directly impacts the quality of future operating cash flow.

Valuation Analysis

You're looking at Security National Financial Corporation (SNFCA) and wondering if the market has it right. Honestly, the stock looks undervalued based on core metrics, but its recent price action tells a story of investor caution. The quick takeaway: the valuation multiples suggest a discount, but the 33.98% drop in the stock price over the last 12 months means you need to dig into the 'why.'

The company's valuation ratios, as of November 2025, are compellingly low, especially when you compare them to the broader financial services sector. Here's the quick math:

• Price-to-Earnings (P/E) Ratio: At approximately 10.81 (Trailing Twelve Months or TTM), Security National Financial Corporation is trading at a significant discount to the S&P 500 average.
• Price-to-Book (P/B) Ratio: A P/B of around 0.56 suggests the stock is trading for less than half its book value. This is defintely a classic sign of a potentially undervalued asset.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio sits at about 5.23, which is also quite low and points to a cheap valuation relative to its operating cash flow before non-cash charges.

What this estimate hides is the market's concern over growth and the insurance industry's inherent risks. The market capitalization is around $204.25 million right now, so it's a smaller player where volatility can hit harder.

Stock Performance and Analyst View

While the ratios look good on paper, the stock price trend is a near-term risk you can't ignore. The share price has fallen by approximately 33.98% over the last 12 months, trading recently around $7.86 per share. The 52-week high was $13.59, which shows just how much ground has been lost. This substantial decline indicates that despite the low multiples, investors are pricing in some serious headwinds, likely related to the overall financial performance where net earnings fell to $7.8 million in Q3 2025 from $11.8 million the prior year.

The analyst consensus reflects this mixed picture, maintaining a Hold rating for Security National Financial Corporation. The average price target is set at $9.50, which suggests an upside of over 16% from the current trading price, but it's not a ringing endorsement to buy aggressively. They're essentially saying: 'Wait and see.'

Dividend Profile

For income-focused investors, the dividend situation is interesting. The cash-based dividend yield is high at approximately 5.95%, with an annualized payout of $0.47 per share. The payout ratio-the percentage of earnings paid out as dividends-is a manageable 49.9%, which indicates the dividend is well-covered by earnings. However, it's crucial to note that the company also declared a 5% stock dividend in June 2025, continuing a 37-year streak of stock dividends. This stock dividend gives you more shares instead of cash, which can be great for long-term appreciation, but it doesn't offer immediate cash flow unless you sell the new shares.

Here's a snapshot of the key valuation metrics:

Your next step should be to look at the balance sheet strength and cash flow to see if the low P/B ratio is justified by asset quality, or if it's a true bargain.

Risk Factors

You're looking at Security National Financial Corporation (SNFCA) and seeing a diversified business, but the recent 34% drop in Q3 2025 after-tax earnings to $7,815,000 tells you the near-term risk profile is elevated. The core issue is that external market pressures and a major regulatory change are hitting their two largest segments simultaneously.

The most immediate and complex risk is the accounting shift. Security National Financial Corporation is implementing Long-Duration Targeted Improvements (LDTI) in the Life Insurance segment in Q4 2025. This new accounting standard will cause significant adjustments to key financial metrics, which can temporarily obscure the company's true financial health and create investor uncertainty. Honestly, you won't get a clean read on the segment's profitability until that transition settles.

Operational and Market Headwinds

The company's operational risks are most visible in the Life Insurance and Mortgage segments. The Life Insurance segment is struggling to drive new business, missing its new premium sales goal in Q3 2025, which contributed to a 43% decrease in pre-tax earnings for the quarter. This is an internal sales challenge compounded by external market volatility, which impacts things like Deferred Acquisition Costs (DAC) amortization and Current Expected Credit Losses (CECL).

The Mortgage segment, while profitable in Q3 2025 for only the third time in three years, is still exposed to a 'very troubled' housing market. Refinance volumes remain high, which is a sign of continued market challenges. Plus, the weakness in sales of starter homes is directly dampening the anticipated profit splits from their builder relationships. Here's the quick math: if the Mortgage Segment were just to break even, it would add 2 percentage points to the current annualized Return on Equity (ROE) of 10.5%. That's how much drag it's creating.

• LDTI implementation: creates reporting uncertainty in Q4 2025.
• Life Insurance sales: missed new premium goals in Q3.
• Mortgage market: high interest rates still cause market turbulence.

Mitigation and Strategic Actions

Management is defintely not sitting still, which is a positive sign. They are addressing the risks with clear, actionable steps. To counter the Life Insurance segment's weakness, they have increased premium rates, a move expected to add 1.5 percentage points to the ROE in the short term. They've also been focused on cost control, with year-to-date personnel costs rising by only 6% through September 2025, a sign of improved efficiency.

On the strategic front, Security National Financial Corporation has deployed over $50 million into residential land holdings this year. This investment is a long-term play to secure future builder profit shares, but it currently generates zero income and requires patience. This is a classic trade-off: short-term cash outlay for potential long-term, high-margin returns.

For a deeper dive into who is betting on these strategies, you should read Exploring Security National Financial Corporation (SNFCA) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at Security National Financial Corporation (SNFCA) and seeing some mixed 2025 results-revenue is up, but net income is down. The direct takeaway is that while the core business segments are showing resilience and strategic progress, the overall financial picture is being weighed down by market-specific headwinds, particularly in the mortgage sector. Still, the company's investment strategy and operational efficiencies point to a clear path back to their historical performance averages.

The nine months ended September 30, 2025, saw total revenue climb to $261.61 million, up from $255.25 million a year ago. Here's the quick math: the annualized Return on Equity (ROE) for that period hit 10.5%, a solid improvement from the 8.5% annualized figure reported in June 2025. That improvement defintely highlights the power of their diversified business model, which is a key competitive advantage.

Segment-Specific Growth Drivers

Security National Financial Corporation's future growth isn't about one big bet; it's about segment-specific execution and market rationalization. The strength is centered on the Life Insurance business and a recovering Mortgage segment.

• Life Insurance: This segment is the profit engine. It posted a 9.1% revenue growth in Q2 2025, with improved profits driven primarily by increased investment income. Management believes newly increased premium rates will add an additional 1.5 percentage points to the company's ROE over the shorter term.
• Mortgage: Despite the still-troubled housing market, this segment was profitable in Q3 2025, a significant milestone as it was only the third profitable quarter in the last three years. Plus, Security National Mortgage Company's origination volumes in Q1 2025 were up 11%, with $518 million in loan volume, which is a massive outperformance compared to the Mortgage Bankers Association's national increase of just 2%.
• Cemeteries/Mortuaries: While this segment saw a slight revenue decline of 1.7% in Q2 2025, the company is focused on improving death care sales, which should have a similar positive effect on ROE as the insurance rate increases.

Strategic Investments and Operational Edge

The company is making concrete, forward-looking investments that should pay off as markets stabilize. They've committed approximately $50 million in gross additional investment toward residential land holdings during 2025. This is a product innovation that positions them for potential higher future yields by leveraging their real estate expertise alongside their financial services. It's a smart, tangible move.

Also, the focus on talent is a quiet but powerful strategic initiative. Security National Financial Corporation has spent heavily on recruiting improved sales and executive talent across all segments. They've managed to offset the immediate cost of this talent acquisition with operational efficiencies, keeping year-to-date personnel costs up only about 6% as of September 30, 2025. That's a sign of good, disciplined management. What this estimate hides is the long-term impact of this improved talent on sales and profitability, which should be substantial.

To dive deeper into the financial mechanics behind these segments, you should read our comprehensive analysis: Breaking Down Security National Financial Corporation (SNFCA) Financial Health: Key Insights for Investors.

2025 Performance Snapshot and Outlook

The nine-month results for 2025 show the Life Insurance segment's strength compensating for the drag from the other segments, particularly the Mortgage business, which is slowly turning around. The book value per share is a clear indicator of underlying value growth.

The competitive advantage here is the financial balance. When one segment, like Mortgages, struggles with a $1.7 million loss in Q2 2025 due to market conditions, the Life Insurance segment's steady, investment-income-driven profit improvement keeps the Return on Equity credible. This diversity provides the capital and time needed for management to execute their turn-around and growth strategies.

Next Step: Finance should model the impact of the expected 1.5 percentage point ROE increase from the new life insurance premium rates on the full-year 2026 earnings forecast by the end of the month.