Review of Chartwell Retirement Residences
JAN 14, 2025 - CSH.UN has been one of the best performing REITs over the past two years amidst broad sector weakness. The Trust has managed to navigate the high-rate environment and execute its acquisitive growth strategy with 2024 being a record year. Unit prices have thus appreciated significantly to where it is quite expensive from a valuation standpoint. However, there are plenty of positive fundamental trends, with increasing occupancy rates, fund flows, and margins. Leverage is high, but we like the recent momentum, and the distribution is well-covered by cash flows. We think future growth from acquisitions and growing occupancy will be positive over the long-term, but we would not expect similar appreciation as seen in 2024. We are maintaining our rating of a B.
Download Report. Thank you
I have a couple of questions about the noted companies - please deduct as you see fit.
I'm interested in dodging direct tariff risks, and it occurs to me that these two names fit that criterion because of their all Canadian business models. Do you think that conclusion is sensible?
Are there material differences between them leading to a clear favourite over the next 5 years? I note the SIA dividend is substantially larger than that of CSH, but would it be reasonable to assume this will be offset by greater share growth by CSH, over time?
And finally, would you consider one (or both) of them appropriate for a RRIF?
Thanks 5i - I look forward to your thoughts. Peter