We prefer Extendicare for new buying

Article Excerpt

EXTENDICARE INC. $7.30 (Toronto symbol EXE; TSINetwork Rating: Extra Risk) (905-470-5534; www.extendicare.com; Shares o/s: 88.5 million; Market cap: $642.6 million; Dividend yield: 6.6%) owns 67 senior-care facilities in Canada. Together, they can house 8,950 residents on both a long- and short-term basis. The company manages another 53 residences that are home to 6,497 seniors. Extendicare also operates 35 ParaMed Home Health Care branches in six provinces. ParaMed provides nursing care and other forms of assistance to clients who remain in their own homes. In the three months ended December 31, 2018, the company’s revenue rose 2.6%, to $288.8 million from $281.4 million a year earlier. Cash flow fell 20.0%, to $12.6 million, or $0.14 a share, from $15.7 million, or $0.18. The main reason for the lower cash flow was reduced hours of service at ParaMed. Like most home-care providers, that business continues to deal with a shortage of personal support workers (PSWs) and, to a lesser extent, nurses. However, intensified employee retention…

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