Purchase cuts Extendicare’s risk

Article Excerpt

EXTENDICARE INC. $8.39 (Toronto symbol EXE; High-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 88.0 million; Market cap: $738.3 million; Dividend yield: 5.7%; Dividend Sustainability Rating: Average; www.extendicare.com) has completed the acquisition of the Lynde Creek Retirement Community in Whitby, Ontario, for $34.5 million. The community includes the Lynde Creek Manor Retirement Residence. This is a modern private-pay luxury facility; it’s also currently 100% occupied, with a strong waiting list. Provinces regulate nursing homes in Canada and provide substantial funding. To offset the uncertainty of that support, Extendicare continues to expand its private-pay segment, which now includes Lynde Creek. The company currently pays a monthly dividend of $0.04. The yearly rate of $0.48 a share results in a high 5.7% yield. Extendicare is a buy. buy…