Based on Statistics Canada, the senior inhabitants accounts for nearly 20% of the entire inhabitants. By 2030, it’s estimated that seniors might characterize as much as 23% of the inhabitants. And, in accordance with the Canadian Institute for Well being Data, the 75 and older age group will double by 2037. Chartwell Retirement Residences (TSX:CSH.UN) is a dividend inventory that may profit significantly from this.
Let’s check out why I believe that Chartwell is an effective inventory to show to on your revenue wants.
A dividend inventory with optimistic long-term secular tendencies
Chartwell is Canada’s largest supplier and proprietor of seniors housing communities, from impartial dwelling to long-term care. This clearly units it as much as profit significantly from the growing older inhabitants.
This growing older inhabitants is a macro pattern that’s right here to remain. It’s a long-term, secular progress pattern that has been a continuing theme of late, and it’s accelerating. Within the final 20 years, Canada’s senior inhabitants elevated 75%. Within the subsequent 20 years, this inhabitants is anticipated to extend 68% to 10.4 million Canadians.
This has been one of many fundamental drivers for Chartwell’s sturdy historical past. As you’ll be able to see from the value graph beneath, Chartwell’s inventory worth has elevated virtually 50% within the final 10 years.
Whereas this isn’t one of the best, Chartwell additionally paid out a dependable and rising dividend over this time interval. In reality, the corporate paid out virtually $7 per share in dividends within the final 10 years, and its dividend grew by 15%.
Understand that Chartwell’s enterprise is a capital-intensive one, and that the pandemic years have been notably onerous on this firm for apparent causes. But, the dividend grew within the final 10 years regardless of these troublesome realities.
Chartwell builds momentum
Again in 2018, Chartwell laid out a strategic plan to enhance the enterprise. The corporate’s objectives included rising resident satisfaction in addition to bettering occupancy ranges to 95%. As beforehand talked about, Chartwell had a really troublesome few years in the course of the pandemic. This meant that these objectives have been in danger.
So whereas Chartwell is behind on these acknowledged objectives, occupancy hit 91.5% within the first quarter of 2025. And it’s anticipated to hit 95% by the tip of the yr. That is no small feat, and one which has been pushed by each the macro tendencies I mentioned and administration’s advertising and promoting. For instance, Chartwell held open home occasions and webinar sequence to drive curiosity and referrals.
What’s subsequent for this dividend inventory?
The long-term progress tailwinds are sturdy they usually proceed to be headed in the proper course for Chartwell. This, as administration says, is the start of a long-term secular pattern that may final for many years.
Proper now, the availability/demand setting for senior dwelling is beneficial for Chartwell Retirement Residences. There are merely not sufficient suites to satisfy the demand of the growing older inhabitants. To get to a place of equilibrium, administration estimates that 200,000 suites would must be constructed within the subsequent 10 years. That’s virtually thrice the variety of suites constructed within the final 10 years.
This dynamic will help sturdy occupancy charges, greater earnings, and better pricing. In flip, all of this may help Chartwell’s money flows, earnings, and naturally, dividends paid. For my part, this dividend inventory has many extra years of dividend funds and progress. It may be relied upon for revenue, now and into the long run.
