Canada, much like the rest of the developed world, has an aging population. While this may initially provoke thoughts of whether your retirement fund will last throughout your golden years, there is another more pressing thought you should consider today: what if you could invest in a company that provided a necessary service to that segment of the population?
That opportunity comes in the form of Sienna Senior Living (TSX: SIA), and here are a few reasons you may want to consider investing.
We’re leading busier lives, with less time for family
As much as we hate to admit it, our lives today, even with all of the technology we have at our disposal to make things easier and quicker, are much busier than they were a decade or more ago. One the one hand, technology has always made us available to our friends and family, but on the other, there is less actual face-to-face time spent with our families, particularly the elderly, which may not be as adept with constantly evolving technology.
Additionally, another emerging trend is that we’re having children later in life. This leaves older families with small children less bandwidth, either from a time or financial perspective, to help out older relatives.
Enter the first of several opportunities provided by Sienna.
Sienna is one of the largest senior housing and care providers in the nation and caters directly to seniors that need assistance through its growing portfolio of residences that have locations across the country. I say growing because, over the past two years alone, Sienna has amassed over one-dozen new homes encompassing over 2,000 suites.
In total, the company has nearly 12,000 beds scattered between B.C. and Ontario, and that number is only going to grow in the future.
We’re also living longer
In addition to our busier lives, we also have better access to medicine, and as a result, we are living longer than ever before. For seniors, this means more medical treatments, and, by extension, longer wait and recovery times relating to those new treatments.
Enter another brilliant opportunity provided through Sienna.
Sienna is not just a long-term retirement and care facility; the company offers both short-term and long-term care options, which can be tailored to the needs of an individual. By way of example, an older relative needing surgery can now opt to move into a Sienna facility for pre- and post-operative care, reducing the burden on their family.
Interesting. What about results?
In the most recent quarter, Sienna saw revenues increase a whopping 18% over the same period last year, coming in at $165 million. Net operating income saw an equally impressive uptick over the same period last year of 31.7% in the quarter, to $40.5 million. The strong revenue figures were backed up by yet another quarter of strong occupancy rates, which remained above 90% across the board and surged as high as 98% for long-term care occupancy.
Operating funds from operations in the quarter hit $22.8 million, or $0.362 per diluted share, reflecting a solid increase over the same period last year.
Finally, Sienna’s monthly dividend saw a 2% uptick in the most recent quarter to $0.0765 per share, resulting in an appetizing and secure yield of 5.36%.
Overall, Sienna is a well-diversified investment option in an emerging segment of the economy that will continue to grow for the foreseeable future. Buy it and forget about it until you reach your golden years.
