Dennis Mitchell, CFAChartwell Retirement ResidencesCSH.UN.TOBUYAug 02, 2013

Well situated in retirement sector across Canada. Cohort of people aged 80+ growing 3-4% annually. Demand exceeds new supply by 4:1. Occupancy levels hitting 95%. Sees double-digit bottom line earnings growth to the end of the decade. A secular change like this is something to pay attention to. Yield is 3.10%.

He did very well with this, but sold it after its relative strength started to deteriorate earlier this year. Rising rates are a headwind to these kind of stocks which will lower capital appreciation. Is the dividend yield enough to offset that loss?

Long-term trend involves demographic + lack of supply of residences. Short term, we've seen pressure on anything that's interest-rate sensitive. Debt is impacted by rising rates, as it's more difficult to service that debt.

If inflation moderates, and doesn't continue its accelerated pace upward, this and other REITs will start to move up again.

Ongoing portfolio management is something management does, and they determined that selling assets recently was a way to unlock value. It's perfectly normal.

He wants to buy it, perhaps soon. Likes the chart and its current consolidation. You could trade it within the current range, or hold it long term given the long-term up trend in the chart. A great stock.

Very compelling theme -- aging population in Canada, limited supply of retirement residences (labour and material costs are high). Not subject to rent controls. It'll grow by acquisition. 

One caveat:  hasn't been doing traditional equity raises to fund acquisitions, but issuing stock from treasury instead. Market didn't love that, and volatility ensued -- message has gotten through to management. Yield is 2.79%.

Likes the industry on long-term demographics, and they're a leader. Great brand. Good place to have $$ over the next 5-10 years.

She owns Chartwell instead, because all their homes are private homes with no government units. Likes the aging demographic and there's a shortage of retirement homes. Also, there are few beds being added.  CSH's occupancy rate is above 95% vs. below 80% during Covid. CSH is buying companies and selling old properties. 

Focused exclusively on private-pay retirement side. Great growth story. Discounted valuation. Over 95% occupied and going higher. Margins increasing, which means double-digit compounded annual earnings growth rate through 2028. Yield is 3.05%.

Great fundamentals including a 4% CAGR, an aging population, boast leading occupancy of 95%, so can raise rents by 4%, while keeping expenses below 4%. Margins are improving. Are in the sweet spot. Sees a lot of upside.

Follows quite closely. Has owned in the past, but not currently. Being a REIT, it's going to grow aggressively by developing projects and buying other companies. So in a downturn in the economy, such as the pandemic, it won't have retained any capital. Instead, they'll have to raise equity, and that's really dilutive to shareholders at a really bad time.

If you're a corporation in the real estate space, you control your destiny a little more.

Phenomenal growth in the space. NAV is his firm's "north star", and the north star just keeps moving. On track to 95% occupancy, at 93% right now. Acquiring homes in an accretive manner. Sees great growth over the next year.

Most favourable sector among the REITs is probably seniors housing like CSH.UN. That sector has risks, such as liability issues during pandemic. Occupancy pretty close to objective of 95%. Demographics are in its favour, people will move there because they need to not because they want to. This would be the one she'd pick to consider.

Supply/demand in the space is good. People usually move in to these places around age 80, and 2025 is the very beginning of baby boomers turning 80. This should really drive demand. Properties are hard to build, also tough to operate, so you really need good management. Entirely retirement, so a little more risk but also more upside. Does better when things in the sector are good.

SIA has a mix of retirement and long-term care, which is government funded, so it's always full. More bond-like, not a lot of growth but really predictable. Does better when things are weaker in the sector.