With most companies’ stock prices above fundamental values, investors are left wondering where they should invest their hard-earned money. Here at Fool, we like to take a long-term view and invest in companies within industries that will be around for years to come and can continue to grow. Fortunately for investors, the senior-housing sector is an industry that meets both of these criteria.
With an aging demographic and an increase in life expectancy, the demand for senior housing will inevitably continue to rise. Therefore, investors should be looking for exposure to this sector. Chartwell Retirement Residences (TSX: CSH.UN) and Sienna Senior Living Inc. (TSX: SIA) are two senior-housing providers in Canada that are poised to give investors reliable returns for years to come.
Chartwell Retirement Residences
Chartwell is the largest owner and operator of senior residences in Canada. One of Chartwell’s biggest advantages is that over 75% of its units are for independent senior living. These are higher-quality units with an experience comparable to a luxury hotel. In addition, the tenants of these types of units tend to be in better health and have longer stays, resulting in stronger cash flows for the company.
From a financial perspective, Chartwell has been able to increase its funds from operations for three consecutive years while offering investors a yield of 3.69%. With a beta of 0.26, investors can weather the storm of market correction with this industry leader.
Sienna Senior Living Inc.
Sienna is the largest long-term-care provider in Ontario with over 35 long-term-care homes and 5,733 beds. In addition, the company has 11 retirement residences in British Columbia, giving it a presence in to two of the most heavily populated provinces in Canada.
With strong occupancy rates of 94.5% in its retirement residences and 98.8% in its long-term-care beds, Sienna should continue to grow and sustain its current yield of 5.25%. More importantly, the stock boosts a beta of 0.25, which means it should be impacted minimally if the stock market falls.
Foolish bottom line
Both of these companies are leaders in the senior-housing sector, and will continue to benefit from an aging demographic. Investors should be looking to take advantage of these sustainable dividends. Regardless of swings in the market, investors can rely on these two stocks for reliable returns for years to come.
