Is it a good company at a reasonable price? I do not like to debt ratios. That is one reason I would personally not buy this stock. I prefer stocks with low yield and good increases. This stock has a high yield and low increases and they have currently stopped increasing the dividends. It is never a good sign when dividend increase stop. A reason to buy is for passive income. I know the analyst’s recommendation is a Buy, but generally speaking, analysts’ recommendations are always a buy. My stock price testing is showing the stock as relatively expensive.
I do not own this stock of Chartwell Retirement Residences (TSX-CSH.UN, OTC-CWSRF). I saw this stock on a dividend investing blog and looked it up on Stock Chase.
When I was updating my spreadsheet, I noticed that this stock has not increased its dividends for the past 5 years. This is never a good sign. Analysts do not see any increases in the near future.
If you had invested in this company in December 2013, for $1,008.80 you would have bought 104 shares at $9.70 per share. In December 2023, after 10 years you would have received $608.03 in dividends. The stock would be worth $1,218.88. Your total return would have been $1,826.91. This would be a total return of 7.45% per year with 1.91% from capital gain and 5.54% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $9.70 | $1,008.80 | 104 | 10 | $608.03 | $1,218.88 | $1,826.91 |
The current dividend yield is moderate with dividend growth is currently non-existent. The current dividend yield is moderate (2% to 4% ranges) at 3.79%. The 5 year and historical median dividend yields are good (5% to 6% ranges) at 5.70% and 5.82%. The 10 year median dividend yield is moderate at 4.80%. The dividend growth over the past 5 years is low (below 8%) at just 0.91%. Dividends have not increased since 2020.
The Dividend Payout Ratios (DPR) are too high. The DPR for 2023 for Earnings per Share (EPS) is far too high at 114% with 5 year coverage at 351%. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is too high at 125% with 5 year coverage at 100%. The DPR for 2023 for Funds from Operations (FFO) is too high at 111% with 5 year coverage is fine at 91%. The DPR for 2023 for Cash Flow per Share (CFPS) is too high at 70% with 5 year coverage at 57%. The DPR for 2023 for Free Cash Flow (FCF) is too high at 482% with 5 year coverage at 796%. There is no agreement on what FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 113.95% | 351.11% |
| AFFO | 124.90% | 100.07% |
| FFO | 111.27% | 90.81% |
| CFPS | 69.52% | 56.88% |
| FCF | 482.02% | 796.13% |
Debt Ratios could stand with improvement. The Long Term Debt/Covering Assets Ratio for 2023 is good at 0.44 and currently at 0.43. The Liquidity Ratio for 2023 is awful at 0.45 and 0.38 currently. If you added in Cash Flow after dividends, the ratios are still awful at 0.58 and currently at 0.59. If you added back the current portion of the long term debt, it is barely acceptable at 1.29 and currently at 1.31. The Debt Ratio for 2023 is low at 1.32 and 1.40currently. The Leverage and Debt/Equity Ratios for 2023 are too high at 4.09 and 3.09 and currently at 3.50 and 2.50.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.56 | 0.46 |
| Lg Term R A | 0.44 | 0.43 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 0.45 | 0.38 |
| Liq. + CF | 0.58 | 0.59 |
| Liq. + CF+D | 1.29 | 1.31 |
| Debt Ratio | 1.32 | 1.40 |
| Leverage | 4.09 | 3.50 |
| D/E Ratio | 3.09 | 2.50 |
The Total Return per year is shown below for years of 5 to 20 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 | 0.91% | 1.69% | -3.03% | 4.72% |
| 2013 | 10 | 1.26% | 7.45% | 1.91% | 5.54% |
| 2008 | 15 | -1.94% | 13.82% | 5.51% | 8.31% |
| 2003 | 20 | -2.91% | 5.91% | -0.22% | 6.13% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 98.85, 153.81 and 208.77. The corresponding 10 year ratios are 154.80, 172.18 and 200.59. The corresponding historical ratios are 6.12, 5.73 and 6.25. The current ratio is 134.50 based on a stock price of $16.14 and EPS estimate for 2024 of $0.12. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap. The 5 and 10 year ratios are very high because of low positive earnings. The historical ones are very low because there were lots of years of negative ratios due to earnings losses. Not a good test of anything.
I have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 16.32, 20.35 and 23.92. The corresponding 10 year ratios are 15.95, 17.38 and 19.09. The current P/AFFO ratio is 23.39 based on a stock price of $16.14 and AFFO estimate for 2024 of 0.69. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I have Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 14.95, 18.13 and 21.31. The corresponding 10 year ratios are 14.71, 16.28 and 17.92. The current P/FFO ratio is 21.81 based on a stock price of $16.14 and FFO estimate for 2024 of 0.74. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $8.63. The 10-year low, median, and high median Price/Graham Price Ratios are 1.35, 1.57 and 1.75. The current ratio is 1.87 based on a stock price of $16.14. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 3.20. The current ratio is 3.61 based on a stock price of $16.14, Book Value of $1,068M and Book Value per Share of $4.47. The current ratio is 13% 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 16.42. The current ratio is 18.98 based on Cash Flow for the last 12 months of $203M, Cash Flow per Share of $0.85 and a stock price of $16.14. The current ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 5.82%. The current dividend yield is 3.79% based on dividends of $0.612 and a stock price of $16.14. The current dividend is 35% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 4.80%. The current dividend yield is 3.79% based on dividends of $0.612 and a stock price of $16.14. The current dividend is 20.9% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 3.33. The current P/S Ratio is 4.08 based on Revenue estimate for 2024 of $944M, Revenue per Share of $3.95 and a stock price of $16.14. The current ratio is 22% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. The dividend yields tests say this. It is confirmed by the P/S Ratio test. Most of the other tests are saying the same thing.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (4). The consensus is a Strong Buy. The 12 months stock price is $18.14 with a high of $19.00 and low of $17.00. The consensus stock price of $18.14 implies a total return of 16.18% with 12.39% from capital gains and 3.79% from dividends.
Lots of analysts in 2024 on Stock Chase like this stock and say it is a buy. However, there are some Holds and a couple of Do Not Buys. Stock Chase gives this stock 5 stars out of 5. Amy Legate-Wolfe on Motley Fool thinks you should buy for passive income. Chris MacDonald on Motley Fool thinks you should buy because of massive demand for Senior Housing. The company put out a press release on Newswire about their fourth quarter of 2023. The company put out a press release via Newswire about their third quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. They give 4 warnings of interest payments are not well covered by earnings; significant insider selling over the past 3 months; shareholders have been diluted in the past year; and dividend of 3.78% is not well covered by earnings. Simply Wall Street gives this stock 2 and one half stars out of 5.
Chartwell Retirement Residences is an unincorporated open-ended real estate trust that is engaged in the ownership, operations, and management of retirement residences and long-term care homes in Canada. The company generates key revenue from retirement operations which include retirement residences that the company owns and operates in Canada. The retirement residences provide services to residents at rates set by Chartwell based on the services provided and market conditions. Its web site is here Chartwell Retirement Residences.
The last stock I wrote about was about was Richards Packaging Income Fund (TSX-RPI.UN, OTC-RPKIF) ... learn more. The next stock I will write about will be Sienna Senior Living Inc (TSX-SIA, OTC-LWSCF) ... learn more on Tuesday, December 11, 2024 around 5 pm. Tomorrow on my other blog I will write about Best Charities in Canada for 2024.... learn more on Tuesday, December 10, 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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