Bury the idea that Hillenbrand is just a casket company. The country’s largest casket maker is now mainly a diversified manufacturing firm, and that part of its business is growing at an impressive clip. That success, together with a 2.89% dividend, makes Hillenbrand a fine income pick.

And as we’ll discuss in a bit, Hillenbrand brings a modern edge to the age-old business of end-of-life services.

Hillenbrand’s manufacturing, or “process equipment,” segment provided nearly $1 billion in revenue in 2015, up about $60 million from 2013. By contrast, revenue from the Batesville funeral services segment has largely flat-lined at $600 million.

Growth Business

Hillenbrand started seriously diversifying away from the funeral business—mainly caskets, urns and vaults—in 2010 with the acquisition of New Jersey-based maker of industrial feeders, K-Tron. Hillenbrand continued buying companies that make equipment that do such things as handle materials, crush minerals and process foods.

This is a relatively stable business because Hillenbrand also makes money providing parts for and fixing the equipment it sells. About a third of the revenue for its process equipment segment comes from parts and service.

Hillenbrand’s most recent acquisition was German-based pump maker, ABEL, in 2015. An agreement to acquire Pennsylvania-based pump maker, Red Valve, was announced in December.

Batesville Caskets

The demand for funeral supplies is strong, driven by inexorable demographic trends. According to the Center for Disease Control the number of U.S. deaths increased from 2.46 million in 2010 to 2.6 million in 2014.

But at the same time, people are spending less on funerals. In 2013, 45% of people who died were cremated, and that’s expected to increase to 56% by 2020, according to the National Funeral Directors Association. As you would expect, a casket for cremation costs less than a traditional one. In 2012 the average cost of a cremation casket and urn at $1,000 was less than half the average cost of a regular burial casket with burial vault at $2,500.

Batesville caskets are still industry standards. The company carries bronze casket models from Classic Gold to Tapestry Rose starting at $4,000.

If instead of metal, customers prefer natural wood, Batesville sells caskets from walnut to maple for $5,000 and $3,000, respectively. But the pièce de résistance is the Promethean Bronze casket that starts at $22,000.

The margins for such lavish caskets are high, and Hillenbrand is trying new ways to keep sales steady. Hillenbrand has equipped their sales reps with Internet-based tools to remain competitive. This won’t lead to the growth that Hillenbrand’s process equipment business has experienced, and casket sales currently comprise only a third of Hillenbrand’s revenue anyway.

Revenue decreased 4% in the third quarter last year when a 7% loss from currency effects hurt Hillenbrand’s 3% growth. The strong dollar meant revenue from the company’s European and emerging markets sales didn’t translate well. Still, disregarding the dollar’s current strength, we are confident in Hillenbrand’s long-term growth because revenue increased 4% for process equipment and 2% for Batesville during the third quarter compared to the same period a year ago.

Even though it can hurt returns short term, international diversification is important to our Global Income Edge strategy. In Hillenbrand’s case, 43% of its revenue comes from overseas. As Europe continues its recovery, revenue should stabilize more, and when emerging markets finally make a comeback, sales growth should accelerate, as demand in those countries tends to exceed that of demand in developed countries.

Shareholder Focus

Hillenbrand has shown it’s sensitive to shareholder needs. The board announced a share-repurchase plan of up to $100 million in July 2015. And although the company’s dividend grew only 1% annually since 2009, it is well-covered (a payout ratio of about 45%) and may increase substantially now that its acquisition binge is slowing.

Thanks to the growth of its diversified machinery business, the consistent demand of the Batesville casket business and Hillenbrand’s concern for shareholder value, the company has positioned itself for continued growth in 2016, earning a spot in our Aggressive Portfolio.

Buy Hillenbrand below $38.