Is it a good company at a reasonable price? This would not be a stock I personally would pick. I do not like their debt level. I would rather have a lower yield and some dividend increases. A reason to buy would be for passive income. This stock is testing at a reasonable price.
I do not own this stock of Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF). When I looked in Stock Chase about Chartwell, Greg Newman; Director & Portfolio Manager, Scotia Wealth Management said he liked Sienna Senior Living Better, so I investigated it.
When I was updating my spreadsheet, I noticed Liquidity Ratio has been awful. A Liquidity Ratio below 1.00 means that the company cannot cover current expenditures. Recently they have had an infusion of cash, but this seems to be because they sold more shares.
If you had invested in this company in December 2013, for $1,004.96 you would have bought 88 shares at $11.42 per share. In December 2023, after 10 years you would have received $807.31 in dividends. The stock would be worth $1,011.12. Your total return would have been $1,818.43. This would be a total return of 8.05% per year with 0.06% from capital gain and 7.98% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.42 | $1,004.96 | 88 | 44 | $807.31 | $1,011.12 | $1,818.43 |
The current dividend yield is good with dividend growth stopped. The current dividend yield is good (5% to 6% ranges) at 5.64%. The 5, 10 and historical median dividend yields are also good at 6.54%, 5.96% and 6.76%. They had increased the dividends occasionally in the past. However, there has been no increase since 2020. The 5 year dividend increase per year is just 0.65%.
The Dividend Payout Ratios (DPR) are passible. The DPR for 2023 for Earnings per Share (EPS) is far too high at 936% with 5 year coverage at 1561%. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is fine at 91% with 5 year coverage at 87%. The DPR for 2023 for Funds from Operations (FFO) is fine at 83% with 5 year coverage at 84%. The DPR for 2023 for Cash Flow per Share (CFPS) is fine at 45% with 5 year coverage good at 37%. The DPR for 2023 for Free Cash Flow (FCF) is too high at 160% with 5 year coverage at 63%. There is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 936.00% | 1561.20% |
| AFFO | 90.87% | 86.50% |
| FFO | 83.20% | 83.93% |
| CFPS | 44.93% | 37.17% |
| FCF | 159.55% | 63.36% |
Debt Ratios need improving. The Long Term Debt/Market Cap Ratio for 2023 is high at 0.90 and currently at 0.66. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2023 which is good at 0.72 and currently at 0.66 because this is a more important one for a Real Estate type company. The Liquidity Ratio for 2023 is awful at 0.12 and 0.43 currently. If you added in Cash Flow after dividends, the ratios are still awful at 0.32 and currently at 0.64. If you add back the current portion of the debt, they are still awful for 2023 at 0.65 and barely acceptable at 1.09 currently. Basically, current assets cannot cover current liabilities.
The Debt Ratio for 2023 is too low at 1.28 and 1.35 currently. I prefer them to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2023 are far too high at 4.54 and 3.54 and currently at 3.89 and 2.89. These ratios should be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.90 | 0.66 |
| Lg Term R A | 0.72 | 0.66 |
| Intang/GW | 0.43 | 0.30 |
| Liquidity | 0.12 | 0.43 |
| Liq. + CF | 0.32 | 0.64 |
| Liq. + CF +D | 0.65 | 1.09 |
| Debt Ratio | 1.28 | 1.35 |
| Leverage | 4.54 | 3.89 |
| D/E Ratio | 3.54 | 2.89 |
The Total Return per year is shown below for years of 5 to 14 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.65% | 0.59% | -6.10% | 6.70% |
| 2013 | 10 | 0.39% | 8.05% | 0.06% | 7.98% |
| 2009 | 14 | 1.73% | 9.90% | 1.31% | 8.59% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 71.54, 88.52 and 105.50. The corresponding 10 year ratios are 61.81, 69.97 and 78.13. The corresponding historical ratios are 39.91, 43.94 and 47.97. The current ratio is 31.32 based on a stock price of $16.60 and EPS estimate for 2024 of $0.53. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 11.26, 13.72 and 15.48. The corresponding 10 year ratios are 10.49, 11.93 and 12.97. The current ratio is 12.77 based on a stock price of $16.60 and AFFO estimate for 2024 of $1.30. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 11.05, 13.05 and 14.69. The corresponding 10 year ratios are 11.13, 13.01 and 14.23. The current ratio is 11.45 based on a stock price of $16.60 and FFO estimate for 2024 of $1.45. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $14.82. The 10-year low, median, and high median Price/Graham Price Ratios are 0.97, 1.16 and 1.29. The current ratio is 1.12 based on a stock price of $16.60. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 2.30. The current P/B Ratio is 2.47 based on a Book Value of $491M, Book Value per Share of $6.73 and a stock price of $16.60. The current ratio is 7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.34. The current ratio is 7.39 based on Cash Flow for the last 12 months of $164M, Cash flow per share 2.25 and a stock price of $16.60. The current ratio is 45% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 6.76%. The current dividend yield is 5.64% based on a stock price of $16.60 and dividends of $0.936. The current dividend yield is 17% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. A problem with this test is that the stock is not a dividend growth stock.
I get a 10 year median dividend yield of 5.96%. The current dividend yield is 5.64% based on a stock price of $16.60 and dividends of $0.936. The current dividend yield is 5% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. A problem with this test is that the stock is not a dividend growth stock.
The 10-year median Price/Sales (Revenue) Ratio is 1.47. The current P/S Ratio is 1.38 based on Revenue estimate for 2024 of $880M, Revenue per Share of $12.06 and a stock price of $16.60. The current ratio is 6% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is the stock price is probably still reasonable. The dividend yield tests say that the stock price is reasonable but above the median. The P/S Ratio test says that the stock price is reasonable but below the median. Most of the rest of the testing is showing the stock price as reasonable and above or below the median.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4) and Hold (2). The current consensus would be a Buy. The 12 month stock price consensus is $18.94 with a high of 20.00 and low of $18.00. The consensus stock price of $18.94 implies a total return of 19.73% with 14.10% from capital gains and 5.64% from dividends.
Analysts on Stock Chase for 2024 give two Do Not Buy, one Hold and one Buy. Worries are there is not much room for capital gains for the future and labour costs are going to be higher in the future. Stock Chase gives this stock 3 stars out of 5. Amy Legate-Wolfe on Motley Fool says to buy for passive income. Jitendra Parashar on Motley Fool says buy for stable monthly income. The company put out a press release via The Canadian Press about their fourth quarter of 2024. The company put out a press release via The Canadian Press about their third quarter of 2024.
Simply Wall Street via Yahoo Finance put out a report on this company and its dividends. Simply Wall Street has 3 warnings on this stock of interest payments are not well covered by earnings; dividend of 5.64% is not well covered by earnings or free cash flows; and shareholders have been diluted in the past year. Simply Wall Street gives this stock one and one half stars out of 5.
Sienna Senior Living Inc is an owner of seniors' housing, a licensed long-term care operator in Ontario, and a provider of services across the full continuum of care. The firm operates solely within Canada. Its web site is here Sienna Senior Living Inc.
The last stock I wrote about was about was Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF) ... learn more. The next stock I will write about will be Bird Construction Inc (TSX-BDT, OTC-BIRDF) ... learn more on Friday, December 13, 2024 around 5 pm. Tomorrow on my other blog I will write about Robin E. Speziale .... learn more on Thursday, December 12, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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