The re-escalating trade tensions between USA and China have taught us several hard-to-swallow but vital truths, one of which is that anything may happen. The Russia-Ukraine is another example where a physical dispute shakes the economic and financial markets to their core. However, not all stocks to buy are susceptible to unanticipated fluctuations in mood and thus, are a must-have for diversified portfolios.
Assisted-living or retirement home stocks are a market segment that will likely deliver significant returns over the next decade. Elderly care is based on two fundamental principles. First and foremost, we have a moral and ethical commitment to assist people who cannot help themselves. Second, everyone is affected by aging. As a result, these specialized-care centers will continue to exist indefinitely.
5 Canadian Retirement Home Stocks You Should Invest In
Here are five retirement home stocks with the best development potential for Canadian investors hoping to make huge money without sacrificing safety.
Chartwell Retirement Residences (TSX:CSH.UN)
Chartwell Retirement Residences is an unincorporated, open-ended real estate investment trust with 15,589 employees worldwide. The firm is in the business of owning, operating and managing retirement and long-term care communities across Canada. Its retirement and long-term care institutions are run independently; with over 200 outstanding retirement communities in four provinces, including sites under construction, it is the largest operator in the Canadian seniors living business. In Ontario, the Long-Term Care operations segment includes about 19 long-term care communities. The Canadian Retirement segment generates the majority of revenue.
On March 31, 2022, Chartwell said that it plans to buy three newly developed retirement residences in Ontario with 467 suites from businesses linked with MTCO Holdings. The purchase price is $228 million, including a $3 million deferred payment, before transaction charges and usual closing adjustments. Collingwood, Barrie, and Bowmanville are the locations of the residences.
Trading at a share price of $13.01 as of April 15, 2022 (2:19 PM), the company holds a market capitalization of 3,038,297,402. It also pays a monthly dividend of 0.051 CAD per share.
Extendicare Inc. (TSX:EXE)
Extendicare operates under the Extendicare, Esprit Lifestyle, ParaMed, Extendicare Assist, and SGP Purchasing Partner Network brands and provides long-term care and services to seniors across Canada. Long-term care, retirement living, home health care, other Canadian businesses, and corporate are the company’s five segments. It owns or operates a network of 119 long-term care homes and retirement communities (69 owned/50 contract services), provides 9.2 million hours of home health care services annually, and provides group purchasing services to third parties representing approximately 93,200 senior residents across Canada. Canada accounts for the great majority of the company’s revenue.
On March 1, 2022, Extendicare Inc. stated that it had signed agreements for the ownership, operation, and renovation of long-term care establishments in Ontario and Manitoba with Revera Inc. and its affiliates and Axium Infrastructure Inc. and its affiliates. As a result of the addition of 56 long-term care homes, Extendicare Assist’s managed home portfolio has doubled.
Trading at $7.92 as of April 15, 2022 (2:32 PM), the company pays a monthly dividend of 0.04 CAD per share. The market capitalization of 709,334,993, when coupled with the P/E ratio of 60.90, proves the profitability of this stock.
Sienna Senior Living Inc. (TSX:SIA)
Sienna Senior Living Inc. is one of the largest owners of senior housing in Ontario and the province’s largest licensed long-term care operator, and a provider of services across the continuum of care. The company only does business in Canada. LTC Business, Retirement, and Other are the three primary business segments of the corporation. The LTC business section includes 35 LTC facilities in Ontario, eight seniors’ living residences in British Columbia, and the LTC management services business. The retirement segment contains 27 retirement residences (RRs), five of which are located in British Columbia and 22 in Ontario and the RR management services company. The LTC division generates the majority of the company’s revenue.
Sienna Senior Living Inc. declared on April 14, 2022, a dividend of $0.078 per common share for the month of April 2022, yielding $0.936 per Common Share on an annual basis.
Trading at $15.55 as of April 15, 2022 (2:39 PM), the company is a significant player in the assisted living facilities sector. With a market cap of 1,131,870,863, the company is a stable investment.
CareRx Corporation (TSX:CRRX)
CareRx Corp is a company that specializes in providing elderly pharmacy services. It provides services to over 50,000 people in over 850 senior and other communities (long-term care homes, retirement homes, assisted living facilities, and group homes). The company is a nationwide corporation with a vast network of pharmacy fulfillment centers strategically positioned throughout the United States. It collaborates actively with its home operator partners to increase resident health, staff education, and the quality and efficiency of the medical system. It makes money in Ontario and Western Canada by selling goods and charging capitated service fees.
CareRx Corporation stated on March 30, 2022, that it had signed a formal asset purchase agreement to buy Hogan Pharmacy Partners Ltd., a long-term care pharmacy in Ontario that serves roughly 725 residents in long-term care facilities and retirement homes.
Trading at a stock price of $5.47 as of April 15, 2022 (2:47 PM), the company has a prominent name in the assisted care and long-term care services. With a market cap of 254,634,255, this stock has extraordinary growth potential, especially after the rise in prices of medicines after the COVID-19 pandemic.
Vitalhub Corp. (TSX:VHI)
Vitalhub Corp is a Canadian company that creates technological solutions for mental wellbeing (child to adult), long-term care, public health, hospice care, public welfare, and acute care providers. Blockchain, mobile, patient flow, web-based evaluation, and electronic health record systems are among the company’s technologies.
Vitalhub Corp. announced on March 31, 2022, that it had struck a deal with Cormark Securities Inc. and Eight Capital as co-lead insurers on behalf of a syndicate of underwriters. Under the terms of the agreement, the underwriters will buy 5,645,200 Common Shares from the Company’s treasury for $3.10 each, for total gross proceeds of approximately $17.5 million.
Trading at $3.07 as of April 15, 2022 (2:58 PM), the company holds a bright spot in terms of growth prospects. The company is a safe and profitable investment in senior housing communities.
Why You Should Invest in Retirement Home Stocks in Canada
The significance of retirement home stocks in any investor’s portfolio is that of the breadcrumbs for rainy days. Retirement homes, independent living communities, assisted living facilities, and nursing homes are necessities that society can never eliminate. As a result, these stocks gain an added layer of protection from downward fluctuation and are least susceptible to crashing.
Other primary factors bolster the case for investing in assisted-living firms. The enormity of the baby boomer population is the most considerable tailwind. Between 1946 and 1964, there were 76 million births in the United States. By 2012, 11 million people from this generation had died, leaving 65 million people alive. That’s a lot of people who will need medical attention in their golden years.
The opportunity exists independent of market or economic situations, which is the elephant in the room regarding the importance of retirement homes and assisted living facilities.
The Bottom Line
After the COVID-19 outbreak, every industry went into a downward spiral, but this sector only grew in market capitalization and importance. Furthermore, advances in medicine and diet have significantly improved our ability to live longer, pushing the life expectancy further than beyond. These all factors will play a significant role in the future, proving this market segment to be highly profitable.
Retirement Home & Assisted Living Stocks in Canada
I think that retail REITs will remain one of the best monthly dividend stocks for conservative investors, regardless of the impact of the pandemic on the industry. Going back to the housing conversation, this is what Jason Hall thinks is the best play about retirement housing. As a REIT and IRAs game, CareTrust plays a prominent role among Senior Living REITs with manageable debt and a secure dividend.
Ensign Group operates qualified nursing and assisted living facilities in the Northwest and provides complementary health services such as physiotherapy, occupational and speech therapy, hospice and home care. The National Healthcare Corporation operates, manages and provides services to licensed nursing facilities, assisted living facilities, independent residential facilities, home health programs and behavioural medicine hospitals. In addition, the segment Healthcare Services provides home health, hospice and outpatient therapies, education and wellness programs for residents of many communities and seniors.
AFS provides supervision, support in daily life activities (ADLs), coordination of services with external health care providers, and surveillance of residents’ activities to ensure residents’ health, safety, and well-being.
In the retirement housing sector, the term “nursing home” is used for facilities designed for over-55s. Assisted living is a segment of the senior citizen housing economy. Assisted living is provided in an independent institution or as part of a multi-level senior citizen housing community. Apartments that meet their needs fall under the roof of senior citizens “homes and can range from mobile facilities that offer independent accommodation to various forms of assisted care.
Independent housing units, assisted living, nursing homes, and care facilities represent profitable investment opportunities for investors in 2020 and beyond. Moreover, as the demand for these types of retirement homes increases with the age of the population, analysts suggest that the most significant long-term gains are likely from companies that specialize in independent housing. Thus, despite the short-term noise, there are some solid businesses to invest in retirement homes in the long term.
Therefore, we believe that the acquisition, rehabilitation and development of senior residences and assisted living facilities represent one of the country’s best risk-adjusted opportunities for commercial real estate and general investment. High-growth stocks are not without risk, and senior REITs are no exception.
Assisted living can be volatile depending on the portfolio and investment objectives and is ideal for day traders or long-term investors who want to look for stocks with steady returns over time. Compare online trading platforms, fees, investment platforms and bonuses to determine what’s best for your assisted living investment.
Investing in a publicly-traded REIT is like investing in any other company. In other words, you will have many of the same questions you would ask yourself when researching whether you should invest in Apple, IBM, or other individual stocks.
Various types of real estate assets are in trouble, such as commercial office space, shopping malls, and REITs, but nursing homes and healthcare facilities are bright spots in the industry. More and more real estate investors are interested in investing in different care segments, from assisted living communities, senior living communities (senior living communities), senior living communities, independent living communities and foster care communities, adult daycare, senior living communities, and nursing homes and housing stock. The broadest category of REIT invests in professionally oriented residential communities, assisted living, and related real estate such as medical buildings.
OTC Real Estate Investment Trusts (REITs) invest in senior real estate and healthcare through sales, leasebacks, mortgage finance, joint ventures and structured financing solutions, including preferred equity and mezzanine loans. Omega Real Estate Investment Trusts invest in the long-term health care industry, particularly in skilled nursing and assisted living facilities. Investors who want to get a piece of the big business model of institutional care or assisted living can participate as passive investors by purchasing shares in many real estate investment trusts specializing in multi-million dollar healthcare facilities.
As the leading housing providers throughout the country, the three listed companies have implemented comprehensive prevention measures and used their existing expertise in infection control. Their efforts have paid off, given the few confirmed coronavirus cases in older communities observed by MACE.
Shares of real estate investment funds focusing on retirement homes and health care have fallen 15% to 40% in the past three months. Companies that own nursing homes and care homes are struggling to contain COVID-19. According to the NIC (Nonprofit National Investment Center for Senior Housing and Care) that tracks the industry, occupancy was 88% in the fourth quarter compared to a recent peak of 90% in 2014.
Several high-profile real estate stocks have fallen, including the Big 3 Real Estate Investment Trusts (REITs). Senior housing stock fluctuates due to a company’s ability to manage debt and keep occupancy high. If real estate is suitable for your investment, REITs are liquid stocks that you can trade on the stock exchange.
Today, it’s a stock that doesn’t look like an investment opportunity based on the numbers, but most analysts expect significant growth in the coming years. Find out which of the 21 best pension stocks you should buy in 2021; these are the 21 best annuity shares you should buy in 2021. These shares appear to be safe dividends due to their ability to generate cash returns of 3% to 7% and have solid potential to increase their payouts over the long term further. This Senior Housing Property Trust, which invests in senior homes and GP surgeries, recently cut its dividend as part of a significant restructuring of its portfolio and deleveraging its balance sheet. Still, it has a long way to go before it is on solid financial footing.