Is it a good company at a reasonable price? I worry about the amount of debt (Leverage and Debt/Equity Ratios) and the very low Liquidity Ratio. I also think of this company more as a Real Estate company than anything else. This is the same as for Chartwell. It is not the sort of company I would be interested in. The stock price testing shows that the stock price is relatively cheap.
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 what I do not like is the very, very low Liquidity Ratio. For 2022 it is 0.25, add in Cash Flow after dividends and it is 0.47. Even adding back in debt, it is 0.99. If this ratio is below 1.00, it means that current assets cannot cover current liabilities. It is even worse for the third quarter of 2023. Ratio here is 0.27, adding in cash flow after dividends, it is 0.51 and adding back in the current portion of the debt it only goes to 0.60. However, others do not seem to be worried about this.
If you had invested in this company in December 2012, for $1,004.00 you would have bought 80 shares at $12.55 per share. In December 2022, after 10 years you would have received $731.04 in dividends. The stock would be worth $872.00. Your total return would have been $1,603.04. This is a total return would be a total return of 6.28% per year with a 1.40% capital loss and 7.68% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.55 | $1,004.00 | 80 | 44 | $731.04 | $872.00 | $1,603.04 |
The current dividend yield is high with dividend growth very low. The current dividend yield is high (7% and above) at 8.63%. The 5, 10 and historical dividend yields are good (5% to 6% ranges) at 6.29%, 5.26% and 6.54%. The dividend growth is low (below 8%) at 0.79% per year over the past 5 years. Dividend growth has never been more than very low. The last dividend increase was in 2019 and it was for 2%. There is often a trade-off between dividend yield and dividend growth.
The important Dividend Payout Ratios (DPR) of AFFO and FFO are currently fine. The DPR for 2022 for Earnings per Share (EPS) are awful, but not that important at 328% with 5 year coverage at 1329%. The DPR for 2022 for Adjusted Funds from Operations (AFFO) is 99% with 5 year coverage acceptable at 80%. This ratio is expected to be 91 in 2024. The DPR for 2022 for Funds from Operations (FFO) is 97% with 5 year coverage acceptable at 80%. This ratio is expected to be 87% in 2024. The DPR for 2022 for Cash Flow per Share (CFPS) is 16% with 5 year coverage at 38%. The DPR for 2022 for Free Cash Flow (FCF) is 139% with 5 year coverage at 107%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 628.19% | 1328.94% |
| AFFO | 99.26% | 80.82% |
| FFO | 96.99% | 80.15% |
| CFPS | 35.75% | 37.71% |
| FCF | 139.28% | 107.15% |
Debt Ratios show that they have a lot of debt. The Long Term Debt/Market Cap Ratio for 2022 is too high at 1.07 with the current one better at 1.19. I also looked at Long Term Debt/Corresponding Assets Ratio and they are fine at 0.81 and 0.89. The Liquidity Ratio for 2022 is awful at .25 and 0.27 currently. If you added in Cash Flow after dividends, the ratios are not much better at 0.47 and 0.51. If you add back in also the current portion of the long term debt, they are still far too low at 0.99 and 0.60. I prefer them to be 1.50 or higher.
The Debt Ratio for 2022 is low at 1.35 and 1.30 currently. I also prefer them to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2022 are too high at 3.87 and 2.87 and currently at 4.31 and 3.31. I prefer them to be below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.07 | 1.19 |
| Lg Term R A | 0.81 | 0.89 |
| Intang/GW | 0.45 | 0.45 |
| Liquidity | 0.25 | 0.27 |
| Liq. + CF | 0.47 | 0.51 |
| Liq. + CF +D | 0.99 | 0.60 |
| Debt Ratio | 1.35 | 1.30 |
| Leverage | 3.87 | 4.31 |
| D/E Ratio | 2.87 | 3.31 |
The Total Return per year is shown below for years of 5 to 13 to the end of 2022. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 0.79% | -3.53% | -9.76% | 6.24% |
| 2012 | 10 | 0.97% | 6.28% | -1.40% | 7.68% |
| 2009 | 13 | 2.04% | 9.73% | 1.01% | 8.73% |
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 47.96, 54.05 and 60.15. The corresponding historical year ratios are 37.98, 39.87 and 159.69. The current P/E Ratio is 77.50 based on a stock price of $10.85 and EPS estimate for 2023 of $0.14. This ratio is between the low and median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median. The Price/Earnings per Share Ratios are really high and probably useless.
I have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations per Share Ratios are 11.06, 13.05 and 14.89. The corresponding 10 year ratios are 11.13, 13.01 and 14.23. The current P/FFO is 10.14 based on a stock price of $1.85 and FFO estimate for 2023 of $1.07. 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 have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations per Share Ratios are 11.26, 13.72 and 15.48. The corresponding 10 year ratios are 10.49, 11.93 and 12.97. The current P/AFFO is 10.64 based on a stock price of $1.85 and AFFO estimate for 2023 of $1.02. 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 Graham Price of $11.35. The 10-year low, median, and high median Price/Graham Price Ratios are 0.97, 1.16 and 1.29. The current P/GP Ratio is 0.96 based on a stock price of $10.85. 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 2.03 based on a Book Value of $309M, Book Value per Share of $5.96 and a stock price of $10.85. The current ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.94. The current P/CF Ratio is 7.49 based on Cash Flow for the last 12 months of $105.7M, Cash Flow per Share of $1.45 and a stock price of $10.85. The current ratio is 46% 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 8.63% based on dividends of $0.936 and a stock price of $10.85. The current dividend yield is 32% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 5.96%. The current dividend yield is 8.63% based on dividends of $0.936 and a stock price of $10.85. The current dividend yield is 45% above the 10 year median dividend yield. 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 Revenue estimate for 2023 of $767M, Revenue per Share of $10.52 and a stock price of $10.85. 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. The dividend yield tests say that the stock price is relatively cheap. It is confirmed by the P/S Ratio test that says the stock price is relatively cheap. Most of the other tests say the same thing.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (2), and Hold (3). The consensus would be a Buy. The 12 months stock price consensus is $13.17, with a High of $14.00 and Low of $12.50. Using the stock price consensus of $13.17, this implies a total return of 30.01% with 21.38% from capital gains and 8.63% from dividends.
There are 8 analysts’ recommendations on Stock Chase for 2023 and 3 says Do Not Buy. Analysts are worried about debt or think there are better places to invest. Only 1 of 8 says Buy. Stock Chase gives this stock 3 stars out of 5. It is not on any of the dividend lists I look at. Christopher Liew on Motley Fool says buy this for its monthly dividends. Jitendra Parashar on Motley Fool like this stock for its monthly dividends. The company put out a press release on Newswire about their 2022 year end results. The company put out a Press Release via Newswire about their third quarter of 2023.
Simply Wall Street via Yahoo Finance looks at this company’s ability to pay their dividends and they have reservations about this. Simply Wall Street put out 2 warning on this stock of dividend of 8.63% is not well covered by earnings or cash flows; and interest payments are not well covered by earnings. Simply Wall Street give this stock 2 stars and a bit more out of 5 stars.
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 group derives a majority of its revenue from Long Term Care segment. 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 15, 2023 around 5 pm. Tomorrow on my other blog I will write about Advice from Legendary Investors .... learn more on Thursday, December 14, 2023 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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