Is it a good company at a reasonable price? A lot of people think that buying this stock you could benefit from long-term demographic trend of Canada. I am not sure this company will do well in the long term. Simply Wall Street is right, the company is increasing their shares and this is a negative. Shares have grown by 5% per year over the past 5 years or in total 28%. The share price would need to be around $13.50 for the 10 year median dividend yield test to show shares as reasonable and below the median. All my test show that the stock price is on the expensive side.
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 this stock has too much debt and it has not been a great investment over the years for shareholders. Mostly, it is not hitting my 8% yearly return with capital gains and dividends. Although it has come close for the 10 year period. I think this is more a real estate investment than a Health Care investment. Revenue is not growing, but is expected to growth in 2025 by 32% with last 12 months growth at 22%.. Net Income seems to be growing a lot, but exactly 5 and 10 years ago, Net Income hit very low values.
If you had invested in this company in December 2014, for $1,005.72 you would have bought 87 shares at $11.56 per share. In December 2024, after 10 years you would have received $514.90 in dividends. The stock would be worth $1,311.96. Your total return would have been $1,826.86. This would be a total return of 7.26% per year with 2.69% from capital gain and 4.56% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $11.56 | $1,005.72 | 87 | 10 | $514.90 | $1,311.96 | $1,826.86 |
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. In column 5, I am showing what growth has been over the past 12 months and what is expected to the end of this year. You can see that Revenue has not grown much over the past 5 and 10 years, but seems to be growing over the past 12 months and expected to be growing this year. Net Income Growth seems good, but exactly 5 and 10 years ago, net income hit very low levels.
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | -6.90% | -1.42% | 22.15% | <-12 mths |
| 5 | FFO Growth | -17.39% | -3.75% | 17.11% | <-12 mths |
| 5 | Net Income Growth | 2000.09% | 83.84% | 14.88% | <-12 mths |
| 5 | Cash Flow Growth | 2.19% | 0.43% | 45.88% | <-12 mths |
| 5 | Dividend Growth | 2.51% | 0.50% | 0.00% | <-12 mths |
| 5 | Stock Price Growth | 8.49% | 1.64% | 34.22% | <-12 mths |
| 10 | Revenue Growth | -1.52% | -0.15% | 32.14% | <-this year |
| 10 | FFO Growth | -5.00% | -0.51% | 23.68% | <-this year |
| 10 | Net Income Growth | 370.66% | 16.75% | 61.24% | <-this year |
| 10 | Cash Flow Growth | 62.80% | 4.99% | 45.88% | <-this year |
| 10 | Dividend Growth | 13.33% | 1.26% | -0.33% | <-this year |
| 10 | Stock Price Growth | 30.45% | 2.69% | -12.14% | <-this year |
The current dividend yield is moderate with dividend growth stopped. The current dividend yield is moderate (2% to 4% ranges) at 3.02%. The 5 year and historical median dividend yields are good (5% to 6% ranges) at 5.70% and 7.58%. The 10 year median dividend yield is moderate at 4.50%. The dividend increases for the past 5 years is low (below 8%) at 0.50%. Dividend increases stopped in 2021. The last dividend increase was in 2020 and it was for 2%.
The Dividend Payout Ratios (DPR) need improving. The DPR for 2024 for Earnings per Share (EPS) is far too high at 744% with 5 year coverage at 324%. However, the DPR for AFFO and FFO are more important. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is fine at 89% with 5 year coverage too high at 107%. The DPR for 2024 for Funds from Operations (FFO) is fine at 81% with 5 year coverage at 96%. The DPR for 2024 for Cash Flow per Share (CFPS) is too high at 54% with 5 year coverage at 59%. I prefer the DPR for CFPS to be 40% or lower.
The DPR for 2024 for Free Cash Flow (FCF) is too high at 144% with 5 year coverage at 349%. The FCF for 2024 ranges from $80.08M to $93.58M. I am using the $80.08M. Analyst expect the DPRs to improve over the next few years.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 744.43% | 323.97% |
| AFFO | 88.70% | 106.52% |
| FFO | 80.53% | 95.83% |
| CFPS | 54.49% | 59.17% |
| FCF | 144.08% | 348.90% |
The Long Term Debt/Market Cap Ratio for 2024 is good at 0.46 and currently at 0.48. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.43 and currently at 0.46 because this is a more important ratio for Real Estate and this company owns a lot of Real Estate. The Liquidity Ratio for 2024 is far too low at 0.36 and 0.57 currently. If you added in Cash Flow after dividends, the ratios are still too low at 0.49 and currently at 1.00. If you added back the current portion of the debt, the ratios are acceptable at 1.40 and currently at 2.31. The Debt Ratio for 2024 is low at 1.36 and 1.46 currently. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.81 and 2.81 and currently at 3.18 and 2.18.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.46 | 0.41 |
| Lg Term R A | 0.43 | 0.46 |
| Intang/GW | 0.01 | 0.00 |
| Liquidity | 0.36 | 0.57 |
| Liq. + CF | 0.49 | 1.00 |
| Liq. + CF+D | 1.40 | 2.31 |
| Debt Ratio | 1.36 | 1.46 |
| Leverage | 3.81 | 3.18 |
| D/E Ratio | 2.81 | 2.18 |
The Total Return per year is shown below for years of 5 to 21 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 0.50% | 5.91% | 1.64% | 4.26% |
| 2014 | 10 | 1.26% | 7.26% | 2.69% | 4.56% |
| 2009 | 15 | -0.63% | 11.57% | 5.42% | 6.15% |
| 2004 | 20 | -2.77% | 5.43% | 0.48% | 4.94% |
| 2003 | 21 | 6.59% | 0.99% | 5.60% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 98.85, 153.81 and 196.81. The corresponding 10 year ratios are 154.80, 172.18 and 202.79. The corresponding historical ratios are 15.31, 18.56 and 21.82. The current ratio is 184.00 based a stock price of $20.24 and EPS estimate for 2025 of $0.11. 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. However, these ratios are really high ones where high P/E ratios can start at 20.00.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 16.65, 20.35 and 23.92. The corresponding 10 year ratios are 16.20, 17.69 and 20.16. The corresponding historical ratios are 14.06, 16.46 and 18.87. The current ratio is 23.26 based a stock price of $20.24 and AFFO estimate for 2025 of $0.87. The current ratio is above high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 14.95, 18.20 and 21.31. The corresponding 10 year ratios are 14.94, 16.53 and 18.65. The corresponding historical ratios are 13.13, 14.81 and 16.86. The current ratio is 21.53 based a stock price of $20.24 and FFO estimate for 2025 of $0.92. The current ratio is above high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Internal Funds from Operations (IFFO) data. The 5-year low, median, and high median Price/Internal Funds from Operations Ratios are 16.12, 19.55 and 22.98. The corresponding 10 year ratios are 14.92, 17.97 and 21.01. The current ratio is 22.00 based a stock price of $20.24 and IFFO for the last 12 months is $0.92. The current ratio is above high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. Internal Funds from Operations (IFFO) data is from the Management’s Discussion and Analysis section of the Annual Statement.
I get a Graham Price of $10.19 using the FFO in the calculations, not the EPS. The 10-year low, median, and high median Price/Graham Price Ratios are 1.34, 1.79 and 1.57. The current ratio is 1.99 based on a stock price of $20.24. The current ratio is above the high ratio of the 10 year median ratios. 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 4.13 based on a Book Value of $1,481M, Book Value per Share of $4.91 and a stock price of $20.24. The current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 17.22. The current ratio is 20.85 based on Cash Flow for the last 12 months of $293M, Cash Flow per Share of $0.97 and a stock price of $20.24. The current ratio is 21% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 5.78%. The current dividend yield is 3.02% based on dividends of $0.61 and a stock price of $20.24. The current dividend yield is 48% 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 4.50%. The current dividend yield is 3.02% based on dividends of $0.61 and a stock price of $20.24. The current dividend yield is 33% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is not a good test unless you are dealing with a dividend growth stock, but when a stock stops growing the dividend it is a bad sign.
The 10-year median Price/Sales (Revenue) Ratio is 3.45. The current P/S Ratio is 5.43 based on a stock price of $20.24, Revenue estimate for 2025 of $1,126M, and Revenue per Share of $3.73. The current ratio is 57% 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 testing as relatively expensive. All the testing is showing the current stock price as expensive. The stock price would have to be around $17.00 before the P/S would show the stock price as relatively reasonable and below the median. The stock price would have to be at around $13.50 or lower for the 10 year median dividends yield to show the stock price as relatively reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (5), and Buy (5). The consensus would be a Strong Buy. The 12 month stock price consensus is $22.95 with a high of $25.00 and low of 22.00. The consensus stock price of $22.95 implies a total return of 16.41% with 13.39% from capital gains and 3.02% from dividends based on a current stock price of $20.24.
Most analysts on Stock Chase seem to like this company, but a couple say not to buy as they do not like the basic set up for long term capital gains. Christopher Liew on Motley Fool thinks buy this will benefit from long-term demographic trend of Canada. Karen Thomas on Motley Fool thinks this company will benefit from strong demand for senior living. The company put out a press release via Newswire about their fourth quarter of 2024. The company put out a press release via Newswire about their third quarter results for 2025.
Simply Wall Street via Yahoo Finance reviews this stock. One negative they point out is that it is hard to grow dividends per share when new shares are regularly being created. Simply Wall Street has 3 warnings out on this stock of interest payments are not well covered by earnings; large one-off items impacting financial results; and dividend of 3.06% is not well covered by earnings.
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. 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 Monday, December 8, 2025 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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