Andrew Moffs Sienna Senior Living Inc SIA-T BUY Mar 31, 2025

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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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.

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.

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%.

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

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.

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%.

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%.

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.