Sienna Senior Living (TSX:SIA) is a Markham-based company that provides senior living and long-term-care (LTC) services in Canada. Today, I want to discuss why this dividend stock is perfect for Canadians who are on the hunt for monthly income. Let’s jump in.
How has this dividend stock performed over the past year?
Shares of Sienna Senior Living have dropped 6.9% month over month as of early afternoon trading on Wednesday, September 13. The dividend stock has increased 1.2% so far in 2023. Its shares have plunged 15% in the year-over-year period. Investors can look back at its past performances with the interactive price chart below.
Why Canadian investors should be eager to get in on this burgeoning market for the long term
Like many countries in the developed world, Canada is wrestling with the reality of a rapidly aging population. Back in 2017, the Canadian Institute for Health Information (CIHI) projected that Canada’s senior population would grow by 68% over the next two decades. In 2017, Canada’s senior population sat at 6.2 million. This report projected that the senior population would reach 10.4 million by 2037.
This rising senior population will require more services in the LTC space as well as more housing. The market researcher Mordor Intelligence recently projected that Canada’s senior living market would deliver a compound annual growth rate (CAGR) of 5% from 2022 through to 2027.
Should you be happy with Sienna Senior Living’s recent earnings?
Sienna Senior Living released its second-quarter (Q2) fiscal 2023 earnings on August 10. The company reported same-property net operating income of $37.1 million in Q2 2023 — up 9.3% compared to the previous year. Sienna posted a 13.9% increase in the LTC segment and a 4% jump in the retirement segment. Moreover, long-term care occupancy rose by 330 basis points to 98.0% in Q2 2023.
The company’s retirement same-property occupancy improved by 10 basis points to 86.9% due to increased resident move-ins and the improved performance of its joint-venture properties.
On the financial front, Sienna Senior Living reported total adjusted revenue growth of 10% to $198 million. Meanwhile, adjusted funds from operations (AFFO) per share climbed 13.6% to $0.268. In the first six months of fiscal 2023, the company posted adjusted revenue growth of 12% to $398 million. Moreover, AFFO per share rose 8.4% year over year to $0.518.
Looking ahead, Sienna Senior Living expects that strong demand fundamentals will power the Canadian senior living market for years to come. The company is looking to take advantage of that demand with several new initiatives and projects that should pique investor interest in 2023 and beyond.
Here’s why I’m buying this dividend stock today
Shares of this dividend stock are trading in favourable value territory at the time of this writing. Meanwhile, Sienna currently offers a monthly distribution of $0.078 per share. That represents a monster 8.3% yield.