The S&P/TSX Composite Index shed 66 points on Monday, March 6. Some of the worst-performing sectors included base metals, battery metals, and health care. Canadian stocks have broadly bounced back nicely in the opening months of 2023. However, readers should still be on the look for discounts.
Today, I want to look at Jamieson Wellness (TSX:JWEL) and Sienna Senior Living (TSX:SIA). These stocks have some interesting similarities that I want to cover in this piece. Moreover, I want to determine which stock is the better buy. Let’s jump in.
The case for Jamieson Wellness stock in 2023 and beyond
Jamieson Wellness is a Toronto-based company that develops, manufactures, distributes, markets, and sells natural health products in Canada, the United States, and around the world. Shares of this TSX stock have declined 7% year-over-year as of close on March 6. The stock has slipped 10% so far in 2023. Readers who want a more detailed look at its recent performance can play with the interactive price chart below.
This company is geared up for strong growth over the long term with aging demographics in the developed world serving as a great tailwind. Indeed, then chief executive officer Mark Hornick emphasized these trends when the stock made its initial public offering (IPO) back in July 2017. Grand View Research recently projected that the global nutritional supplements market would reach $620 billion by 2030. That would represent a compound annual growth rate (CAGR) of 6.3% from 2022 through to the end of the forecast period.
Investors got to see Jamieson’s final batch of fiscal 2022 earnings on February 23, 2023. The company achieved revenue growth of 21% to $547 million for the full year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Jamieson delivered adjusted EBITDA growth of 23% to $123 million. Moreover, adjusted net earnings were reported at $65.1 million or $1.55 per share — up 18% and 17%, respectively, compared to the prior year.
Here’s how aging demographics will secure Sienna Senior Living’s future
Sienna Senior Living is a Markham-based company that provides senior living and long-term-care (LTC) services in Canada. Its shares have dropped 23% year over year. Meanwhile, the stock has jumped 1.9% so far in 2023.
This is another company that is well positioned to benefit from Canada’s aging population. Indeed, the population growth of seniors in Canada is unprecedented in the nation’s history. These citizens will require adequate housing and services. Sienna is one of several private sector entities that must rise to the occasion to meet this demand. Back in 2017, the Canadian Institute for Health Information forecast that the +75 age group would double over the next two decades. Meanwhile, the total population of seniors would climb to 10.4 million compared to the 6.2 million it stood at in 2017.
In the fourth quarter of 2022, Sienna Senior Living continued to achieve retirement occupancy gains of 440 basis points. Meanwhile, LTC occupancy reached 96%. For the full year, Sienna delivered total adjusted revenue growth of 10% to $736 million. Looking ahead, the company expects 2023 to be comparable with 2022, as it aims to meet the increased demand for seniors’ living.
Which stock is the better buy right now?
Relative Strength Index (RSI) is a technical indicator that measures the price momentum of a given security. Shares of Jamieson Wellness last had an RSI of 26, putting the stock in technically oversold territory. Jamieson also has a solid price-to-earnings ratio of 25, putting it in better value territory than its industry peers.
Sienna stock recently pulled out of oversold territory and now possesses an RSI of 35. This stock offers a monthly dividend of $0.078 per share, representing a monster 8.3% yield. However, that dividend payment is on shaky ground when we consider Sienna’s recent earnings and cash flows.
I’m looking to snatch up Jamieson stock over Sienna, as we close the books on the first week of March. Jamieson offers superior value, growth potential, and is in a more stable position on the earnings front. Better yet, this stock also offers up a quarterly dividend of $0.17 per share. That represents a 2.1% yield.