Get 3.3% from Extendicare

This company represents one of the most compelling investment opportunities in Canada’s healthcare sector. It’s well-positioned to capitalize on powerful demographic and industry changes. The company’s strategic transformation into a diversified senior care provider also strengthens its competitive advantage.

Demographically, Canada’s population aged 85 and older is projected to double by 2036 and triple by 2051. That creates an unprecedented demand for the company’s services.

Meanwhile, the stock trades at a reasonable 18.5 times the company’s forward earnings forecast.

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.

Extendicare delivered exceptional performance in the second quarter ended June 30, 2025. In fact, it demonstrated robust year-over-year growth across all key financial metrics compared to the same quarter in 2024. The company generated $383.4 million in revenue, representing a solid 10.0% increase from $348.5 million a year earlier. This growth was driven primarily by strategic acquisitions and strong performance in the home health care segment.

Net income reached $31.9 million in 2025, marking an impressive 23.3% increase from $25.9 million. Earnings per share expanded even more dramatically, rising 26.7% to $0.38 from $0.30. That reflects both improved profitability and the company’s share buybacks. Meanwhile, operating cash flow grew substantially by 19.9%, to $52.9 million from $44.2 million a year earlier. Free cash flow increased 12.4% to $39.0 million.

[ofie_ad]

Dividend Stocks: Acquisitions create a dominant integrated care provider

The company completed two transformative acquisitions during the quarter. In June, Extendicare acquired nine long-term care homes from Revera for $41.9 million, adding 822 LTC beds and 574 private pay retirement beds to its portfolio. This transaction is expected to contribute approximately $109.3 million in annual revenue and $6.8 million in net operating income.

The ParaMed unit has also completed its acquisition of Closing the Gap Healthcare Group Inc. and certain affiliates. The purchase price was $75.5 million, but the transaction costs may ultimately be higher depending on whether the business achieves certain targets.

Founded in 1990, Closing the Gap is a leading provider of integrated home and community-based healthcare services in Ontario and Nova Scotia. It delivers adult and pediatric care services in patients’ homes and in community clinics.

In addition to personal support and nursing services, Closing the Gap has expertise in allied health services, including physiotherapy, occupational therapy, speech language pathology, nutrition and social work.

Based on Closing the Gap’s 2024 financial performance, its acquisition should add roughly $84.2 million in revenue to Extendicare’s home health care segment; its profit margins are very similar to those of Extendicare’s ParaMed.

With monthly dividends of $0.042 per share, Extendicare provides an attractive 3.3% yield. The dividend payout is sustainable, representing a healthy 33.2% of earnings.

Extendicare trades at 18.5 times its forecast earnings. That multiple is attractive relative to many of the company’s North American competitors.

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

Copy
Link copied
Email
Print

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.

Find 5 Safe Stocks to
Buy & Hold for Long-Term
Growth and Steady Income

No Credit Card Required

SEND ME THIS FREE REPORT

Testimonials

The cornerstones of Pat’s strategy–value, diversification and timelines–make his newsletter, The Successful Investor, highly profitable while minimizing risk. His advice is no-nonsense, down-to-earth and based on solid research. You’ll know what to invest in and what to avoid.

Chuck Chakrapani, PhD
Investors Association of Canada
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

Jonathan Chevreau
Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

John Sartz
I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Free Reports

5 Best Stocks to Buy This Month

The Successful Investor Approach to AI Investing

7 Winning Strategies for Dividend Investors

The Best Blue Chips for Canadian Investors

The ETF Investor’s Handbook

The Canadian Guide on How to Invest in Stocks Successfully

Power and Profits of Energy Stocks

Juniors to Giants: The Complete Guide to Mining Stocks

How to Find the Best Growth Stocks

7 Pro Secrets to Value Investing

Browse Topics

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund.. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.