RE:RE:RE:RE:RE:RE:RE:RE:RE:No reason for it to be going DOWN I think you are a bit confused about cost of capital and optimal capital structure.
Every real estate related business uses leverage (debt) to grow its business. Under capable stewardship, and prudent decision making, the debt gets rated by third parties positively and allows firms to issue debt at a certain level. The interest on this debt is tax deductible so the after-tax cost of debt can be very attractive relative to the cost of equity. Inevitably, for a well run real estate related firm, the cost of debt can be hundreds of basis points below the cost of equity.
Sienna generates adequate cash flow to both pay its dividends and make sustaining capex. Half of its business is long term care, which is 100 percent funded by provincial governments. The other half is Retirement HOMES, which is not funded by government so more volatile but has the ability to generate higher returns. The company's 10/17/2029 4.436 percent bonds are currently trading around par, so the after tax cost of this debt is a tad over 3 percent, a far cry from the high single digit cost of equity capital. Hence, the judicious use of debt.
if the market was worried about sienna's leverage , the bonds would trade really wide and this would send a message to the company that it needs to take action . This isn't currently the case.
good luck to all.