Topic: How To Invest

Pat: Can I have your views on Extendicare REIT? Regards.

Article Excerpt

Extendicare REIT, $9.95, symbol EXE.UN on Toronto (Units outstanding: 79.6 million; Market cap: $791.6 million), is one of the largest retirement and nursing-home operators in North America. Extendicare’s 263 long- and short-term senior-care facilities can house about 29,200 residents. In the three months ended June 30, 2010, the real estate investment trust’s revenue fell 5.9%, to $514.4 million from $546.6 million a year earlier. The U.S. accounts for a third of the trust’s revenue. If you exclude the negative impact of the higher Canadian dollar, revenue would have risen 2.8% in the latest quarter. Excluding one-time items, cash flow per unit rose 10.3%, to $0.43 from $0.39, partly because Extendicare cut its costs during the quarter. Extendicare’s units yield 8.4%. In the first half of 2010, the trust paid out roughly 57% of its cash flow as distributions. Extendicare’s cash flow is steady, and it is in a growing business. However, finding qualified employees remains a problem for the company, and the senior-care…