Sienna Senior Living Inc T.SIA

not impressed at all

[Hich1205]

The numbers are good, but I don't like the capital management. In their way to compensate shareholders or to grow business, the management are relying heavily on stock dilution .... and I don't like that. Still holding a decent number of shares, but now I'm trying to see if the grass is greener somewhere else. The business is growing but the available funds / share is shrinking leaving amost no hope for dividende increase.

[BlueJay2020]

Sorry, that is complete nonsense.  They are investing in growth projects which will be immediately accretive but set themselves up for bigger growth in the coming years.  The prudent way to do that is by capital raises.  There is ample scope for dividend increases over the next few years.  Just look at the YTD payout ratio, which will continue to decrease as we move forward

[Hich1205]

Agree to disagree. In the last 3 years they issued around 20 millios shares and that's a lot. And based on the futur growth they are expecting through acquisition, i am expecting more dillution. Thats not how other players in the market like exdenticare, chartwell ... are doing it. They ar3 experi3ncing the same growth and even more , with stoxk dilution.

[AmorFatiforlife]

I also disagree with your statement. The company has been buying back shares and introduced an employee share program.  I have been buying since 2019 and this is the first raise they have done.  They did the raise at a premium to market value at the time.  Within months of the PP they announced they were acquiring those new facilities which with add to future growth and revenue of

[Hich1205]

numbers speak for theirself: outstanding shares in 2017: 46 M outstanding shares in 2024: 83M ie. that's almost a 100 % capital dilution with the consequence of a lesser AFFO/share : 2017: AFFO/SHARE = 0.326 2024: AFFO/SHARE = 0.266 ie. yes the pizza is larger, but we have to split it with much more people, leading to my slice being smaller.   stock performce for the last 5 years

[Ciao]

Interesting comps to show performance. What is the total return if you take into account dividends?

[Hich1205]

nope, the dividends were not included in the performance benchmark since when I did my investment all of the 3 had similar yield. But if we have to includ dividend, the picture will not change over the last 5 years: sia +26%, exe +59%, csh +45%, so even if the SIA business is doing well, the stock is underperforming both the market and its peers 

[AmorFatiforlife]

I see you're point.  SIA has also been a favorite target for short sellers over the last 4 years...only now they have moved to other targets.  

[BlueJay2020]

So are you seriously saying that they should have been financing themselves entirely on debt and not equity raises?  Do you not think that would be/would have been a risky strategy?  How do you think the stock would have performed as interest rates rocketed?  Do you think 'your piece of the pie' would be biogger or smaller than it is now?

[Hich1205]

No, not entirely by debt, that will increase the premium risk with terrible impact on the stock price. the job of the CFO is to ensure that the finance structure will be accretive for shareholders, if the investment is dillutive and leads to lower piece of the pie, go back to your deck and change the economics of the deal : review the price, change the % of fundings sources and ultimately don'