Extendicare (TSX:EXE) is a Markham-based company that operates long-term care facilities. Demand for senior care has steadily risen as North America faces an aging population.
Companies like Extendicare will be well-positioned to grow as the population of seniors is expected to grow to nearly 25% by 2030.
Shares of Extendicare have climbed 40.9% in 2019 as of mid-afternoon trading on September 30. The company released its second quarter 2019 results on August 14.
Revenue rose 1.6% year-over-year to $284 million while adjusted EBITDA fell to $25 million compared to $27.4 million in the prior year. Extendicare battled lower home health care volumes and increased costs in the quarter.
The company reported consolidated cash and short-term investments on hand of $84.4 million at the quarter’s end. This represents an $18.5 million increase from December 31, 2018.
The company declared dividends of $21.3 million in the first six months of 2019, which represents roughly 77% of adjusted funds from operations.
Investors will be getting more than solid growth with this stock. Extendicare offers a monthly dividend of $0.04 per share. This represents a tasty 5.6% yield.
The stock possesses a high P/E ratio and P/B, but the macro trends working in Extendicare’s favour make it worth the value it offers right now. I’m targeting this stock for its monthly income and growth potential in October.
