Friday, October 19, 2007

Chartwell Seniors Housing - CSH.UN

I’ll continue on the natural gas theme next week…in the meantime. I increased my position in Chartwells Senior Housing yesterday bringing CSH.UN up to just over 5% of my portfolio.

“Chartwell is a growth-oriented investment trust owning and managing a complete spectrum of seniors housing communities. It is the largest participant in the Canadian seniors housing business and the third largest in North America. Chartwell will capitalize on the strong demographic trends present in its markets to grow internally and through accretive acquisitions. Chartwell also has an exclusive option to purchase stabilized communities from Spectrum, Canada's largest and fastest growing seniors housing development company.”

-The company is well positioned to capitalize on the aging North American demographic
-They have a significant presence in the higher margin category of retirement homes (ie-retired wealthy people)
-I’ve recently talked to a few people who have just placed their parents in a Chartwells nursing home and they were blown away at the quality of the accommodations and services provided in the home.

Dividend Yield: 8.9%
Current P/E– 0
Projected 2007 P/E – 16.5X
Projected 2008 P/E – 12.3
Price/Sales – 1.9
Price/Book – 1.3

-Were recently for sale but did not receive any offers that management thought were acceptable.
-Have primarily been a growth by acquisition story but are now concentrating on bringing in all operations.
-BMO rates them as “outperform”
-National Bank has a $15 price target
-Canaccord has a $12.5 price target
-First Call consensus is a hold

For more information on CHS.UN please visit their website at:
www.chartwellreit.ca

9 comments:

Anonymous said...

Owning a complete spectrum? They own SRO flophouses for seniors?

Unknown said...
This comment has been removed by the author.
Unknown said...

Being a trust, the 8,9% is considered a distribution, not a dividend.

That makes a lot of difference, tax-wise (unless you hold it into an RRSP or other tax-deferred vehicle).

That being said, I was watching this one from the sidelines, waiting for signs it may have hit the bottom.

I think I may jump in next week as it seems to hold pretty well around 12$ given the current market turbulence.

Unknown said...

Oh and one thing I don't like (or don't understand) about this trust is that their payout ratio is high (way more than 100% of distributable income), which is not sustainable.

The reasons behind this go beyond my tiny financial wisdom though, maybe someone can explain ?

Retirement Community Long Island said...

Sometimes, retirement plans in other places are bias. They collect more member's distributions for almost 20% of the monthly salary.

QUALITY STOCKS UNDER 5 DOLLARS said...

Very interesting

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