Chartwell Retirement Residences (CSH.UN.TO)

Likes this company. There is good secular growth that underpins the sector, i.e. that the number of people over age 65 is going to double within the next 25 years, which obviously creates more demand for retirement residences and facilities. This is one of the biggest providers in Canada, and do a fantastic job when it comes to managing expenses. If you own, you could consider taking a little money off the table, but it is a good, long term hold.

(Top Pick Oct 6/15, Up 13.54%) He likes the REIT space and the healthcare space, but wanted to stay away from the Pharma space. This one was an outperformer compared to its peers. Stay with it.

Owns some of their convertible debentures, which will eventually become stock. Thinks it is going to be a little more difficult to repeat their success going forward. They will make small tuck-in acquisitions where they can, and you will get the dividend plus a tiny bit of growth. Valuations are relatively fair right now.

(Top Pick Mar 12/15, Up 16.21%) They refocused into Canada and are starting to raise their dividend. She likes the outlook for senior’s housing. Penetration is very low in the industry. Their occupancy is increasing and has further to go. The cash from the US assets is being used in Canada now for growth and acquisitions.

The sector is rather strange because of a transforming acquisition by Ontario Teachers on Amica, which messed up all valuations on these retirement investments. Sold their US assets and are now totally located in Canada. The largest provider of seniors housing. Have done a good job of curtailing costs and have grown through acquisitions. They only pay out about 70% of their Net Operating Income. They are in a good spot to execute further, as well as a possible distribution increase. The sector is still somewhat expensive.

It is a pretty good long term hold. 4.5% yield and it is off the recent highs. The payout is about 80% which leaves room for error or dividend increases. They have promised another dividend increase. Their occupancy rates are historically low so there is room for improvement there. The retirement business is a tough business with low margins, but there is no shortage of potential clients, who are getting peak value for their homes as they move out of them. He would buy at these levels.

Extendicare (EXE-T) or Chartwell (CSH.UN-T)? This has a higher percentage of independent living and would be his preference. It has slimmed-down and is more of a Canadian focused retirement play right now. He likes it when there is a mix of assisted independent and full government support.

Has reduced his holdings in REITs, but when you look at Canada he doesn’t think interest rates are going to go up soon, they are definitely going to stay where they are. Because of that, REITs should have a good level of support here. He is cautious because of the housing market. His company has a $14 target on this.

Has owned this for a number of years. The stock has pulled back and this is a good opportunity to pick it up. In 20 years, 1 out of 4 persons are going to be over the age of 65. As we live longer, the demand for seniors housing really kicks in. Longevity is increasing. This company is very well positioned. They sold off their US operations, and refocused on Canada. Dividend is attractive at 4.5%.

A sector he likes, but has not gone into. Everyone recognizes the demographic imperative. We have more people over 65 than under 14 for the first time in history. The evidence is that they can make money and these guys are one of the better operators. It is more like a hotel than an apartment building in that there is high staffing.

They have been a problem for so many years. They blew their brains out trying to get into the US. But now, since they sold those assets, they lowered their debt and own good assets now. Retirement residences are better than nursing homes.

He looks at financials and meets with management as well as visiting facilities. It is especially important with seniors’ housing because it is so operationally intensive. It is important that the properties are as fully leased as possible. You have to assess demand and supply of real estate. It has been very hard for them to push occupancy over 90% but they have finally done it. In the future the demand will increase. The payout ratio and the balance sheet are reasonable. They could buy back stock or make acquisitions. There is a speculation they could get a bid from a US buyer. He is comfortable buying it here.

Has often used this as a core holding. Their market focus is on seniors’ retirement homes. They are able to provide an excellent service and are excellent operators, but also combine that with real estate expertise and development. He wants to continue to be invested in this for a long time. 4.3% dividend yield.

(Top Pick Dec 9/14, Up 14.23%) She continues to like it. They were quick to re-deploy their capital from selling off US holdings. People are living longer, increasing demand.

A good, long term play. They have one of the largest public portfolios in Canada. A very attractive asset for perhaps a US company that is looking to expand, or perhaps a Canadian pension fund. If nothing happens, you collect a very good dividend. This is slow, steady growth, and should do quite well in this low interest rate environment.