RE:RE:RE:RE:RE:RE:RE:No reason for it to be going DOWNRespectfully, it will be very difficult practically and politically for the provincial governments to eliminate the for-profit LTC operators. Firstly, the fiscal situations are already dire and the billions that would be required to both buyout for-profits and take on the funding themselves. THis was proposed by the NDP post the COvid noise, and was not just rejected, but additional funidng for both operations and construcution was provided by the provinces to the for-profits. Secondly, old people are active voters, and an important block for the politiical parties. TUrning the LTC sector on its head is politically stupid, and impractical. Politicians may be stupid, but they have to please voting constituents.
Secondly, Sienna's balance sheet is reasonable, in terms of leverage and maturities and yield on its debt. The 30 top CDN REITs have leverage range from the very low (ERES REIT at 4.5x debt/EBITDA) to the higher end (Interrent REIT at 11.1xd). Sienna sits in the middle, not unreasonable considering the stability of its business. All REITs utilize leverage, as in many cases, it is cheaper than the cost of equity. As they purchase assets, however, they occasionally have to raise equity capital in order to maintain leverage ratios. This equity capital raise was done by Sienna in 2H/24 in conjunction with an asset purchase that was also funded with leverage (debt).
THe last point involves profitability. REITs historically have been valued using FFO (funds from operations) and AFFO (adjusted funds from operations), rather than Net Profit. On these measures, Sienna is expected to generate in excess of $100 million in 2025.
Sienna is not risk free, but outside of a pandemic, the risk on the share price most closely correlates to bond yields these days imo...
Good luck.