Is it a good company at a reasonable price? The stock price is cheap. However, this stock is more like a real estate stock than a (Health Care) consumer stock. The stock price may be cheap. However, I personally do not like the debt ratios. The Liquidity Ratio is awful. With a Liquidity Ratio below 1.00, or even with very low ones is a big gamble as things can go very wrong in bad times. So, personally, I would not invest in this stock. However, lots of people do like it.
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 the company has done better over the past 10 years than the past 5 years. The lower Funds from Operations (FFO) growth than Revenue growth could be because the Revenue Growth per Share is negative over the past 5 and 10 years. Revenue per Share growth is down by 1.6% and 1.7% per year over the past 5 and 10 years. (This company is sort of like a Real Estate company and that is why they are looking at FFO growth.)
| Year | Item | Growth |
|---|---|---|
| 5 | Revenue Growth | 34.27% |
| 5 | FFO Growth | -13.50% |
| 5 | Net Income Growth | 79.81% |
| 5 | Cash Flow Growth | 110.15% |
| 5 | Dividend Growth | 4.00% |
| 5 | Stock Price Growth | -8.45% |
| 10 | Revenue Growth | 130.43% |
| 10 | FFO Growth | 35.00% |
| 10 | Net Income Growth | 272.40% |
| 10 | Cash Flow Growth | 268.63% |
| 10 | Dividend Growth | 10.17% |
| 10 | Stock Price Growth | 33.24% |
If you had invested in this company in December 2011, for $1,003.92 you would have bought 89 shares at $2.11.28 per share. In December 2021, after 10 years you would have received $805.59 in dividends. The stock would be worth $1,337.67. Your total return would have been $2,143.26.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.28 | $1,003.92 | 89 | 44 | $805.59 | $1,337.67 | $2,143.26 |
The dividend yields are high with dividend growth low. The current dividend yield is high (7% and higher) at 8.49%. The 5, 10 year and historical median dividend yields are good (5% and 6% ranges) at 5.34%, 5.96% and 6.42%. The dividend growth is low (below 8%) at just 0.79% per year over the past 5 years. The last dividend increase was in 2019 and it was for 2%. In the last 11 years, dividends have gone up 5 times and have not been decreased.
The Dividend Payout Ratios (DPR) are fine based on FFO and AFFO. The DPR for EPS for 2021 is 302% with 5 year coverage at 708%. No analyst expects this to improve. Probably because the stock is more real estates than anything else, they give out Adjusted Funds from Operations (AFFO) and Funds from Operations (FFO) data. The DPR for AFFO for 2021 is 86% with 5 year coverage at 73%. The DPR for FFO for 2021 is 82% with 5 year coverage at 74%. The DPR for Free Cash Flow (FCF) for 2021 is 110% with 5 year coverage at 97%. Analysts expect this to grow worse over the short term and sites do not agree on FCF.
Of the Debt Ratios the Liquidity Ratio, a very important one, is awful. The Long Term Debt/Market Cap Ratio is fine at 0.89. The Liquidity Ratio is awful at 0.42 and even if you add in cash flow after dividends it is 0.66. Low Liquidity Ratio for 2021 can get a company into trouble in bad times. The Debt Ratio for 2021 is also low at 1.34. I prefer both these ratios to be 1.50 or higher. The Leverage and Debt/Equity Ratios are too high at 3.96 and 2.96. I prefer these to be below 3.00 and below 2.00.
The Total Return per year is shown below for years of 5 to 12 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 0.79% | 4.21% | -1.61% | 5.82% |
| 2011 | 10 | 0.97% | 10.06% | 2.91% | 7.14% |
| 2009 | 12 | 2.04% | 11.54% | 3.83% | 7.70% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 41.84, 48.02 and 54.19. The corresponding 10 year ratios are 39.91, 43.94 and 47.97. The corresponding historical ratios are 9.47, 9.84 and 10.20. The current P/E Ratio is 25.74 based on a stock price of $11.02 and EPS estimate for 2022 of $0.43. The current ratio is below the low of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. However, this is more like a Real Estate stock and these ratios are very high.
I have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.30, 13.05 and 14.63. The corresponding 10 year ratios are 11.25, 12.82 and 13.76. The current P/FFO Ratio is 11.48 based on FFO estimate for 2022 of $0.96 and a stock price of $11.02. 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 have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.26, 12.87 and 14.48. The corresponding 10 year ratios are 10.12, 11.73 and 12.67. The current P/AFFO Ratio is 11.72 based on AFFO estimate for 2022 of $0.94 and a stock price of $11.02. 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 $12.15. The 10-year low, median, and high median Price/Graham Price Ratios are 0.97, 1.15 and 1.27. The current P/GP Ratio is 0.91 based on a stock price of $11.02. 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 get a 10-year median Price/Book Value per Share Ratio of 2.30. The current P/B Ratio is 1.61 based on a Book Value of $458M, Book Value per Share of 6.83 and a stock price of $11.02. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.94. The current P/CF Ratio is 6.00 based on Cash Flow for the last 12 months of $123M, Cash Flow per Share of $1.84 and a stock price of $11.02. The current ratio is 57% 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 6.42%. The current dividend yield is 8.49% based on a stock price of $11.02 and dividends of $0.936. The current dividend yield is 32% above 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 5.96%. The current dividend yield is 8.49% based on a stock price of $11.02 and dividends of $0.936. The current dividend yield is 42% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.47. The current P/S Ratio is 1.03 based on a stock price of $11.02, Revenue estimate for 2022 of $717M, and Revenue per Share of $10.70. The current ratio is 30% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. Both the dividend yield tests point to this and it is confirmed by the P/S Ratio test. The other tests point to a cheap to reasonable stock price.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is 14.50. This implies a total return of $40.07% with 31.58% from capital gains and 8.49% from dividends.
Mostly analysts on Stock Chase like this stock, but one felt you should not buy because of the Debt. I agree. Stock Chase gives this stock 4 stars out of 5. It is not on the Money Sense list. Jitendra Parashar on Motley Fool thinks this is a great stock for passive income. Kay Ng on Motley Fool thinks this stock is good for the long term and in the meantime is providing a great income. The company put out a press release on Newswire about its third quarter of 2022. The company put out a press release on Global Newswire about its year end results for 2021.
Simply Wall Street gives this stock 3 stars out of 5. Simply Wall Street via Yahoo Finance reviews this stock and its dividend. Simply Wall Street puts out 5 warnings on this stock of earnings have declined by 4.4% per year over past 5 years; interest payments are not well covered by earnings; dividend of 8.56% is not well covered by earnings or cash flows; large one-off items impacting financial results and shareholders have been diluted in the past year
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. The firm operates solely within Canada. The company is comprised of the following main business segments, LTC Business, Retirement and Other. 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 Monday, December 19, 2022 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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