Chartwell Retirement Residences (CSH.UN.TO)

The number of people globally, over 65 years of age, will probably double over the next 20-25 years. That increase will result in more demand for retirement housing. This company should really benefit, provided you don’t see a material increase in supply. Not particularly cheap and is probably fairly valued here. Senior Housing is probably amongst the most operationally intensive asset class in commercial real estate. Great management team. He would probably look elsewhere. Dividend yield of 3.6%.

Has no exposure to REITs because of valuations. Also, these names are ultrasensitive to even a whisper of interest rates going up. Any time you buy into an asset class that has done as well as REITs, combined with how sensitive they are to interest rate movements, it is a risky proposition. However, this one is top of class.

A big fan of management and their story. People are getting older and need someone to take very good care of them, and this is a very good operator. The real estate component looks very attractive as well. The stock is fairly valued, perhaps a little bit rich, but he continues to hold at these levels. If there was a significant real estate correction, this company would be affected along with others in senior residences. 3.7% dividend yield.

High-quality. Everyone understands the business and everyone understands age demographics. The service this company provides is going to continue to be in demand. What has helped them, is what he believes is hurting them at this point. Some of the names such as this have seen a real inflow of capital, so are trading at all-time high multiples. When there is a correction, it tends to be quite sharp. Too expensive at this time. Dividend yield of 3.8%.

She has owned it for quite a number of years. It is the largest seniors housing player in Canada. She likes the demographics play. The company sold off all their US properties and they have been developing and re-investing the money. It has a 3.5% yield. It has been strong over the past three weeks. She would not buy it here, but hold it. Wait for a pullback if you want to imitate a position.

He likes this very much. A low risk company. Not the cheapest, but it’s a stock that usually trades at a premium, deservedly so. This is an OK place to enter. You have the demographics behind it and a large retiring population. There is a great real estate market, so seniors’ homes can be sold. Yield of 3.6%.

Extendicare (EXE-T) or Chartwell seniors housing (CSH.UN-T)? Both are in the retirement space. This has been around for a long time. They had US operations, but sold them. Very focused on different levels of care, independent, semi-independent and full care. If he had to buy one, it would be this one.

Chartwell (CSH.UN-T) Extendicare (EXE-T) or Sienna (SIA-T)? Of these 3, this is the one he owns and continues to like. It is seniors housing, and looking at the demographic tailwind, it should support all 3 of these, but this one more than any. The number of people over 65 are going to double within the next 25 years. This is the largest operator.

A fantastic company. Not only a real estate company, but also an operating company. This is less focused on the noise of the real estate sector, which may or may not happen as interest rates move, but focused on that large demographic wave of seniors who need and deserve the best care.

Has an issue with REITs in general. He doesn’t see much growth. A lot of people really love this one. It is the positioning and the growth in their health care facilities. He gets that, but his problem is the valuation. It is basically trading at 16X enterprise value to EBITDA. You are paying an extremely high multiple, which is a bit at risk if interest rates start to go higher. He wouldn’t be buying any REITs.

The stock has done quite well, and has recently pulled back because of the scare of interest rate sensitivity. While this is classified as a healthcare name, it does have a yield of just under 4%. It is the largest operator in Canada. Some money has come out of this space as a whole. She likes the seniors housing industry. Has a target price of $16, plus the yield. (Analysts’ price target is $16.18.)

As a longer-term stock with a nice dividend and growth profile, this certainly meets his parameters. There is more and more population that is aging, and will end up in these assisted-living and long-term care facilities that they run. They’ve been very good at both building new facilities and acquiring them. They also know the right time to sell.

NWH.UN-T vs. CSH.UN-T. CSH.UN-T has decent growth because of their demographics. His problem with REITs is that they were one of the biggest beneficiaries of the low interest rate. He looks at the cap rate and turns it into an enterprise value and you are paying 15-16 times operating cash flow. You should pay that for a high tech company, not a healthcare company. You are paying out 80-90% of the income as yield. You can’t do that in other sectors. Where is the money to invest in the business – how does it grow? He went short the REITs about two months ago. He does not like either one, but if forced to choose it would be CSH.UN-T.

(Market Call Minute.) Thinks this is pretty decent here, and he would probably be inclined to accumulate this.

This is for the aging consumer. We are all getting older. Demographics show that the over 65 population is about 16% of our overall population. It is forecast that by 2035 it is going to be over 25%. There will be increased demand for assisted care. This company pulled out of the US last year and reinvested back into Canada. They are very well positioned. Dividend yield of 3.78%.