Extendicare Positioned for Share Price Growth Amid Aging Demographic Trends

Extendicare Inc. is pivoting toward the high-demand, high-margin service sector as aging demographics continue to work strongly in its favour.

Extendicare offers unmatched exposure to the “silver tsunami": the rapidly growing population of Canadians aged 80 and older. By aggressively expanding its home health care division (ParaMed), the company is pivoting away from the capital-intensive risks of owning physical real estate and toward the high-demand, high-margin service sector.

The recent acquisition of CBI Home Health is a game-changer that provides immediate scale and significant cost synergies. This should boost earnings per share throughout 2026.

With the stock currently trading at a discount to its long-term growth potential and offering a reliable monthly dividend, it offers investors strong potential for long-term gains.

EXTENDICARE INC. (Toronto symbol EXE; www.extendicare.com) owns and operates long-term care homes. Investors also tap the company’s ParaMed Home Health Care branches. ParaMed provides nursing care and other forms of assistance to clients who remain in their own homes.

The company keeps expanding its ParaMed unit and that has spurred its shares to all-time highs.

ParaMed will purchase CBI Home Health for $570.0 million. CBI delivers over 10 million hours of care annually across seven provinces, anchored by sizeable Ontario and Alberta operations. To put that price in context, Extendicare’s market cap is $2.3 billion.
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Note—CBI Home Health is highly complementary to Extendicare’s current home health platform, and it will add to cash flow per share.

Extendicare’s revenue and earnings rocket following acquisitions

In the most recent reported quarter ended September 30, 2025, Extendicare delivered an exceptionally strong performance which reflects the successful integration of recent acquisitions and organic growth in its home health segment. Revenue for the quarter surged to $440.3 million, a 22.6% increase compared to the $359.1 million reported in the same period a year earlier. This growth was fuelled by the recent acquisition of “Closing the Gap”, which provides home and community-based healthcare services in Ontario and Nova Scotia. Increasing home health care volumes also contributed to that revenue gain.

Profitability followed an even steeper trajectory during this period. Net earnings rose to $24.1 million, representing a 48.0% increase over the $16.3 million the company earned in the same quarter in 2024. A key metric for the company, Adjusted EBITDA (excluding out-of-period items), grew by 40.6% to $50.8 million. Cash flow from operating activities remained robust as the company capitalized on improved occupancy in its LTC segment and higher billing rates for home health. That provides the liquidity needed to fund its aggressive expansion strategy.

With the April 2025 payment, Extendicare raised your monthly dividend by 5.0%. Investors now receive $0.042 a share instead of $0.04. The new annual rate of $0.504 yields 2.1%.

Extendicare has raised your dividend by an average of 1.0% annually over the past five years. The company’s TSI Dividend Sustainability Rating is Average.

At 22.7 times forward earnings, Extendicare is trading at a premium to its historical five-year average of 14. However, this premium is justified by the fundamental transformation of the business. The company is no longer just a traditional “nursing home” operator; it is now the dominant home health services provider in Canada.

Recommendation in Dividend Advisor: Extendicare Inc. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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