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 that there used to be a big difference in dividends calculated using number of units and dividend rate and the dividends actually paid because they had a Dividend Reinvestment Plan. However, in 2021 this plan is being temporarily suspended in order to prevent dilution at the current share price given increased stock market volatility.
It seems more like a Real Estate company than a Health Care company to me. The use of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) shows that it is being valued like a Real Estate Investment Fund (REIT).
The dividend yields are good with dividend growth low. The current dividend yield is good (5% to 6%) ranges at 6.42%. The 5, 10 and historical dividend yields are also good at 5.34%, 6.09% and 6.54%. The dividend growth is low (below 8%) and almost non-existent at 0.79% per year over the past 5 years. Although when you have relatively high yields, you cannot expect much in growth.
The Dividend Payout Ratios (DPR) are probably fine, but a bit high for my liking. The DPR for EPS for 2020 cannot be calculated because of an earning loss. The 5 year coverage is 748.52%. Because this stock is treated like a REIT, we have DPR for Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). The DPR for FFO for 2020 is 91% with 5 year coverage at 72%. The DPR for AFFO Ratio for 2020 is 91% with 5 year coverage at 68%. The DPR for Cash Flow per Share (CFPS) for 2020 is 69% with 5 year coverage at 55%. The DPR for Free Cash Flow (FCF) for 2020 is 119% with 5 year coverage at 91%. There is some disagreement on what the FCF is, but differences are small.
Debt Ratios are awful for a regular company, but if you think of it as a Real Estate company, they are maybe acceptable. The Long Term Debt/Market Cap for 2020 is 0.95. This is high, but Long Term Debt/Covering Assets Ratio for 2020 is 0.76. The Debt Ratio is low at 1.36. The Leverage and Debt/Equity Ratios are too high at 3.75 and 2.75 and I prefer them to be less than 3.00 and less than 2.00.
The Liquidity Ratio is awful at 0.54 and gets only to 0.66 when you add in Cash Flow after dividends. This means that current assets cannot cover current liabilities. The Current Liabilities/Asset Ratio is fairly good at 6.33. However, Long Term Debt/Cash Flow is high at 13 years, where generally you expect this to be around 3 years, except for Real Estate. If you add back current portion of the long term debt in the Liquidity Ratio, the ratio becomes 1.24. This is still low, but sort of acceptable.
The Total Return per year is shown below for years of 5 to 11 to the end of 2020. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 0.79% | 3.34% | -2.61% | 5.95% |
| 2010 | 10 | 2.25% | 19.21% | 8.51% | 10.71% |
| 2009 | 11 | 11.46% | 3.61% | 7.84% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 54.07, 60.09 and 66.11. The corresponding 10 year ratios are 9.47, 9.84 and 10.20. The corresponding historical ratios are all negative so they are unusable. The current P/E Ratio is 12.91 based a stock price of $14.59, EPS estimate for 2021 of $1.13. This ratio is between the median and low of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
The wild swings in ratios are because at first the company had earning losses, then a few years of a reasonable profit and then low profit. They have only had a profit in 5 of the last 10 years. Most of the P/E Ratios cannot be taken seriously. A P/E Ratio of 12.91 is a good one or shows the stock at a relatively reasonable price.
Since this stock is more like a REIT, we need to look at Price/ Funds from Operations Ratios (FFO). The 5 year low, median, and high median Price/FFO Ratios are 11.20, 13.05 and 13.83. The corresponding 10 year ratios are 11.31, 12.57 and 13.62. The current P/FFO Ratio is 12.58 based on a stock price of $14.59 and FFO estimate for 2021 of $1.16. This ratio is between the low and median of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Since this stock is more like a REIT, we need to also look at Price/ Adjusted Funds from Operations Ratios (AFFO). The 5 year low, median, and high median Price/AFFO Ratios are 10.74, 12.11 and 12.68. The corresponding 10 year ratios are 9.69, 11.41 and 12.44. The current P/FFO is 13.03 based on a stock price of $14.59 and AFFO estimate for 2021 of $1.12. This is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $12.74. The 10 year low, median, and high median Price/Graham Price Ratios are 0.94, 1.11 and 1.22. The current P/GP Ratio is 1.15 based on a stock price of $14.59. The current ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Book Value per Share Ratio of 2.21. The current P/B Ratio is 2.35 based on a Book Value of $417M, Book Value per Share of $6.22 and a stock price of $14.59. The current ratio is 6% 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 13.94. The current P/CF Ratio is 10.63 based on Cash Flow for the last 12 months of $92M, Cash Flow per Share of $1.37 and a stock price of $14.59. The current ratio is 24% 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 6.54%. The current dividend yield is 6.42% based on dividends of $0.936 and a stock price of $14.59. The current dividend yield is 2% below the historical dividend. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 6.54%. The current dividend yield is 6.42% based on dividends of $0.936 and a stock price of $14.59. The current dividend yield is 5% above the historical dividend. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.38. The current P/S Ratio is 1.47 based on Revenue estimate for 2021 of $665M, Revenue per Share of $9.92 and a stock price of $14.59. 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.
Results of stock price testing is that the stock price is probably reasonable. The dividend yield and P/S Ratio testing says reasonable with above and below the median. Some of the rest of the testing varies from cheap to expensive and reasonable.
Is it a good company at a reasonable price? The stock price is probably reasonable. However, I would personally not buy this stock. It is really a real estate company and it has very high debt. The Liquidity Ratios are awful.
When I look at analysts’ recommendations, I find Buy (3) and Hold (7). The consensus would be a Hold. The 12 month stock price consensus is $16.53. This implies a total return of 19.71% with 13.30% from capital gains and 6.42% from dividends based on a stock price of $14.59.
When I looked at analysts’ recommendations last year, I found Strong Buy (2), Buy (2), and Hold (5). The consensus would be a Buy. The 12 month stock price consensus is $14.53. This implies a total return of 11.51% with 4.76% from capital gains and 6.75% from dividends based on a stock price of $13.87. What happened is a stock price of $14.59 and a gain of 11.94% with 5.19% from capital gains and 6.75% from dividends. This was pretty accurate. Last year I said that the stock price was probably reasonable.
Analysts on Stock Chase have very different recommendations from Top Pick to Do Not Buy. Christopher Liew of Motley Fool likes the under $20 stock price and high yield of this company. Adam Othman on Motley Fool likes the high dividend yield of this company and he thinks it is sustainable. A Simply Wall Street writer via Yahoo Financeworries about the poor Dividend characteristics of this stock. The company talks about its third quarter on Globe Newswire.
Sienna Senior Living Inc is one of the largest owners of seniors' housing, the largest licensed long-term care operator in Ontario, and a provider of services across the full continuum of care. 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 December 22, 2021 around 5 pm. Tomorrow on my other blog I will write about Undervalued Canadian Stocks.... learn more on Tuesday, December 21, 2021 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. 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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