Sienna Senior Living Inc (SIA-T)

Demographics is a huge tailwind. LTC component is a steady business and government-controlled; transitioning a bit away from this. Canada-only. The 85+ demographic is expected to triple in the next 25 years. Yield is 5.6%.

Loves the space. Core holding. Wouldn't be shy adding here. Defensive profile, as over half its portfolio is in LTC. Mainly in Ontario, where wait list is over 50k. Rents are paid by the Ontario government. Nice job growing retirement side, with a compelling demographic.

Supply is barely 1% of inventory. Anytime there's a mismatch between supply/demand, it's usually a positive. Heading for 95% occupancy. Expects great cashflow growth.

Very compelling supply/demand fundamentals. Tailwind of seniors' population growth. Retirement portfolio recovering nicely. LTC care segment in Ontario is seeing massive waiting lists. Phenomenal management team. Discount to NAV. On track to higher occupancies. Yield is 6%.

This has been an extremely good performance year for long-term-care REITs. Not sure there's much more in terms of capital gains from where we are now. Unless substantial pullback, wouldn't buy now.

Good place to be. Lots of tailwinds in the sector, especially after Covid. 

Squarely within definition of growth for next 5 years. 42 LTC (97% occupied), 40 retirement homes (85% occupied, with goal of 95%). If goal is met, high single-digit internal growth over next several years. Yields around 6.7%.

He recommended this when shares were beaten up during Covid. The government wasn't going to let SIA fail. But he sold all shares around $14, because operating costs (labour) will forever will be higher. It's a tougher business now, though SIA is managed well and demand is huge from the aging population.

Private pay plus long-term care. LTC accounts for over half its business, government regulated, less potential for growth. Pandemic costs are waning. Likes the sector demographics. She owns CSH.UN instead.

Adjusted revenue increased by 5.6%, and the company focused on operating efficiencies which led to NOI growth and a double-digit increase in Operating Funds from Operations. Its occupancy grew by 2.5% in Long-Term-Care, and during the quarter it paid down credit facilities, increased its liquidity, and extended its weighted average term to maturity of debt. Higher interest rates may increase its interest expenses in the coming years, but management still expects 1.0% to 1.5% growth in its 2023 operating margins in its retirement segment. These results were OK, but the company does trade at a high valuation and has a high debt load with a net debt/EBITDA ratio of 8.9X. We feel this will take some time to see positive momentum.
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It should get back to pre-pandemic levels but there are better growth opportunities elsewhere. Their investment in this space is in Chartwell which is all private pay and is no longer in the long term care business.

Pandemic challenges continue, especially for labour. Good, long-term business. Costs have increased. Demand is still there. Starting to come back. Debt. Won't see dividend increases soon. If it goes up, take some money off the table. Better places to put your money.

Likes senior living space.
Has been investing in private REIT space for seniors.
Trend that will last for decades.
Current share price presenting value.
Would recommend buying.

The quarter for SIA looked fine. Net operating income was up 9.9% with retirement up 11% and LTC up 9.1%. Occupancy was up to 88% in the retirement business with LTC at 97% occupancy. They were also able to increase rates by 5% and the outlook sounds largely optimistic. 

Its not our favourite sector in general but things are moving in the right direction and think a case can be made if looking for something with an outsized yield.
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Previously, a very stable business with a nice distribution yield. The pandemic threw all this out the window. Difficulties on occupancy and labour costs. Very solid management. Pursuing attractive growth opportunities. Retirement portfolio has done surprisingly well throughout the pandemic. Challenge on LTC side will hopefully pass. Difficult stock, but you'll be rewarded long term.