Chartwell Retirement Residences (CSH.UN.TO)

(Kicked out of the REIT sector because it doesn’t qualify anymore. Looked on more as healthcare.) It is still interest sensitive. Chart shows a huge leg lower this year, along with the higher yield. The trend is still very much lower. You probably want to stay away from this one right now.

Likes the aging demographics and the Senior Housing industry. The seniors’ population is going to be growing much higher than the general population. This has been trending down because 1) the prospect of rising interest rates and 2) this is being removed from the REITs Index in mid June, and she expects there is going to be a lot of Index selling.

This really depends on your view on the whole retirement residence area. Demographics are good because of our aging population. One of the difficulties is getting staff. Labour costs are something you have to watch quite closely. Has come off in the last few months, mostly because of worries about what is going to happen with US interest rate increases. If you don’t think rates are going to go up much in the next year, this is a pretty good buying opportunity.

The retirement residence business in general is a growth area because of the aging population. They tend to be good businesses over the long-term. Seeing that the stock has been under pressure, legging in is probably the right thing to do. His preference would be Extendicare (EXE-T).

A high dividend REIT with some growth, but he would put this in the Hold category.

There are some questions about what they will do with the proceeds from their US disposition. There is also a concern they will get kicked out of the REIT index. He thinks you should buy it at these levels, however. If they use the cash to buy something it should be something very accretive.

This is a better story now. It had invested in retirement homes in Canada and in the US. In the US, you had to deal with regulations, unionization and the rates of return that were poor. They have since exited the US and are trying to make a cleaner story, which is all Canadian. Also, it is a demographic story. Not that expensive. Not a bad Buy now.

This is going to be dropped from the REIT Index in June. For some time it technically hasn’t been a REIT, but a SIFT. It has to do with how much of its income does not come directly from property, but from other services. He still loves the name; however there may be some selling coming up in June. He would Buy on any weakness.

The largest Senior Housing operator in Canada. She likes this industry. The demographics obviously work in their favour. The seniors’ population of 75+ is going to double over the next 20-30 years. The penetration of seniors in housing communities is actually very low, and that can increase over time as people live longer and require more care. Just announced they were selling their US operations, so they will be getting a big whack of cash of about $420 million. Attractive yield of about 4.5%-5%.

One of the major attractions of the seniors housing REIT is the demographics tailwind. This happens to be the biggest in Canada. Recently sold its US properties, which could be very, very timely because of the currency. This will allow them to pay down some debt. Dividend yield of 4.56%.

(A Top Pick April 29/14. Up 22.96%.) This is supported by both the demographics and the business. We have an aging population that needs more care.

Seniors housing play. Just sold off their US assets. Some think the value was not as good at it could have been. Will repatriate the funds back into Canada. This year there will be a good supply/demand balance. He would add to it here. The dividend is sustainable. They have a dominant share in Canada.

(A Top Pick March 19/14. Up 23.18%.) Recently sold some of their US assets. This has been an M&A candidate for some time. Large US healthcare REITs have been looking to grow their portfolios and their cost of capital is very attractive, so the sale of assets was not a surprise. It simplifies the business, because it will now be a fully Canadian seniors housing REIT. This will help them reduce their leverage and will probably end up focusing on developments and redevelopments in Canada.

A demographic play. Occupancy was 93% pre-recession. This is improving. They increased distribution 2% recently. They said they wouldn`t increase the distribution until they felt an increase each year was sustainable.

Got a new CEO five years ago. They had a lot of debt and now they are waiting for the dividend to go up. They have said they will do it when they can continue to do so on an ongoing basis. He would not sell until the dividend was raised.