Extendicare Inc (EXE.TO)

It pays a good dividend. The financials are not too bad. Wage hikes might have hurt them. They have been doing takeovers. He is happy to hold it and might double down on it if it comes down much more.

Extendicare (EXE-T) or Chartwell Retirement (CSH-U-T). Both are good long term holds. He prefers and owns Chartwell. Will see continued growth in this sector. There were shorts on Extendicare and the rebound lately has been a short covering.

It's been beaten up, but the technicals look really good. It's broken a downtrend. Everything is lined up from a fundamental and technical perspective. If it breaks $8, then it should have no resistence to reach $10. Nice dividend above 6%. (Analysts' price target: $8.83)

Owned in past, not now. Two concerns are the balance sheet and government involvement. Current Ontario inquiry plus more regulation could squeeze margins. Well run, lots of growth. Regulatory environment would keep him away.

They are a leader in Canada, used to be in the US but pulled back. He bought it but it pulled back. He is getting a good return from the coupons. He thinks this one can double. They have more debt than he would like to see but the payout ratio is reasonable. It is in a good demographic area. They are growing organically and through takeovers.

They have been paying out too much in dividends so the book value has been slipping. It looks like the company is rolling over. The fair market value is 13% under where it is trading. He sees more downside than upside.

Sadly, REITs do not do well in rising rates due to them being a bond proxy. He would be a seller of the recent REIT rally in general. They have weakening earnings and no revenue growth. He would be a seller.

Pays a decent dividend, but not loads of growth. You'll see 2-4% earnings growth. Also, this is interest-rate sensitive. Over 10 years, their chart has been sideways, and the next five years will likely be like the past five.

He likes Extendicare. They haven’t been doing well but they pay a good dividend every month. Their debt is too high but they are a leader in the Canadian field. This is a demographic play on an aging population. They recently took over some homes in Whitby. He is happy to hold this while it pays a dividend. It might take a few years before it rises but it could then double.

They are mainly long-term care facilities, compared to Chartwell which is mainly retirement homes. The long-term care is very regulated and very low margin. There aren’t many ways to grow this business. You can try to add new services (if the regulators will let you) or add retirement homes. Growth is constrained. The homes are aging and need capital. You should look at this like a bond replacement. It doesn’t have the same flexibility or upside as retirement homes.

He owns this one and sees its value in real estate assets. It has come back to trend line support, he says, and sees $8.16 as key support. Resistance would be around $9.50, he thinks. For now, hang on to it. Yield 5.5%.