OCA - Oceania Group - retirement villages

[couta1]

Thanks Percy & thestg
Wow this is interesting, which is the cheapest now/looking forward?

Correct me if wrong, but think I read OCA's existing 50 sites have significantly lower unit density coverage per site than SUM or RYM, meaning OCA has the potential to increase/double the number of units without the need to find & purchase more land.
Got to be a good thing?

Re the land issue, your correct. In terms of which is cheapest, ask yourself which of the 3 will be the first to double in price from now, correct answer begins with an O.

[BobbyMorocco]

Re the land issue, your correct. In terms of which is cheapest, ask yourself which of the 3 will be the first to double in price from now, correct answer begins with an O.

That's great because that's the same answer I've got! Also my thoughts are that if we entered a sustained downturn (bear market) sometime in the future OCA's share price would hold up the best as it is more defensive in nature due to their higher weighting of earnings coming from aged care compared to the likes of SUM and RYM. Also OCA has lower debt levels and pays a higher dividend. This should also help them out if things started looking gloomy. Not that I'm thinking things are heading that way, I'm just thinking out loud and looking ahead.

[ziggy415]

Re the land issue, your correct. In terms of which is cheapest, ask yourself which of the 3 will be the first to double in price from now, correct answer begins with an O.

Ah of course Orsum

[Patient Panda]

Just as well there’s not a ‘rule’ that says they all should have the same multiple (in reality it’ll never be that way anyway)

Otherwise RYM shareprice would be only $4 odd

Sure if you’re only looking at 1/3 of the business. As we all know theres a lot more to a business and to generating returns than net tangible assets. NTA of course does not reflect or incorporate the people both employees and management, brand and pricing power, etc.. etc...
extremely easy to see where Rym gets its multiple from.

and I know you know this winner but good to keep things balanced

[winner69]

Sure if you’re only looking at 1/3 of the business. As we all know theres a lot more to a business and to generating returns than net tangible assets. NTA of course does not reflect or incorporate the people both employees and management, brand and pricing power, etc.. etc...
extremely easy to see where Rym gets its multiple from.

and I know you know this winner but good to keep things balanced

So right panda


I only said what I did n response to the implied assumption that OCA is 'cheap' because it has a lower multiple than the others and probably that thinking assumes that OCA should trade at multiples much closer or even the same as the others

but you have explained my all are not equals

[moka]

How many retirement homes can you go into aged 65 ?

I presume you mean retirement villages, not retirement homes. Retirement homes are rest homes where you receive care because you can no longer manage in your own home.
There are hundreds of smaller villages that you can go into at age 65, or even 50 or 55. They tend to be the “lifestyle” villages, without care facilities, although they may have a long-term plan to build care facilities. Some are privately owned, others are run by groups such as churches, masons or charitable trusts.

https://www.villageguide.co.nz/retirementvillages/

“At the time of entry, applicants generally need to be over 65 years of age and able to cope with the day-to-day running of their accommodation.”
“The Village offers an affordable coastal lifestyle and is operated by a Registered Charitable Trust. Ideally suited to those who are independent and young at heart (60 years plus),”
“The village is managed by the local community Trust and provides an attractive, affordable lifestyle for residents in the 55+ age bracket”

• “You must be 55 years of age or older
• At the time of purchase, of an Occupation Right Agreement you must be in good health
• In certain circumstances (e.g. ill health or breach of the terms of your Agreement), the Management has the option to repurchase your unit”

[moka]

Also my thoughts are that if we entered a sustained downturn (bear market) sometime in the future OCA's share price would hold up the best as it is more defensive in nature due to their higher weighting of earnings coming from aged care compared to the likes of SUM and RYM. Also OCA has lower debt levels and pays a higher dividend. This should also help them out if things started looking gloomy. Not that I'm thinking things are heading that way, I'm just thinking out loud and looking ahead.

If we have a downturn and property prices drop all retirement villages will suffer because what happened after GFC is that people were reluctant to sell up and move into a retirement village because they would “lose” money on their property if they did so e.g. their property was worth $400K in 2007 and only worth $300K in 2009. So they decide to sit tight and not sell until property prices rise again. Or they couldn't sell their home even at a lower price because the property market just dried up. Units at retirement villages such as Metlifecare often took 1 – 2 years to sell, sometimes longer after the crash.

[percy]

As per www.4-traders.com
………………………………………………..………...ROA...…………………...ROE...…… ………..PE...……………..Yield
Ryman …….....2019e...……………………...4.45%...……………..10.9%...… ………….19.2...…………..1.89%
………………... 2020e...……………………...4.49%...……………...11.4%...…………... 17.1...…………..2.18%
Summerset....2019e...……………………...4.42%...……………...10 .5%...…………...14.4...…………..1.68%
……………….. 2020e...……………………...4.48%...……………….10.8%...…………….13 .1...…………..1.98%
Oceania...……..2019e...………………….4.30%...……………...9.96 %...…………...10.9...…………..4.25%
…………….. ... 2020e...……………………...4.48%...……………..11.2%...……………….9 .7...…………….4.96%

[Patient Panda]

As per www.4-traders.com
………………………………………………..………...ROA...…………………...ROE...…… ………..PE...……………..Yield
Ryman …….....2019e...……………………...4.45%...……………..10.9%...… ………….19.2...…………..1.89%
………………... 2020e...……………………...4.49%...……………...11.4%...…………... 17.1...…………..2.18%
Summerset....2019e...……………………...4.42%...……………...10 .5%...…………...14.4...…………..1.68%
……………….. 2020e...……………………...4.48%...……………….10.8%...…………….13 .1...…………..1.98%
Oceania...……..2019e...………………….4.30%...……………...9.96 %...…………...10.9...…………..4.25%
…………….. ... 2020e...……………………...4.48%...……………..11.2%...……………….9 .7...…………….4.96%

Hey Perc 4traders v useful but their Rym numbers have me skeptical.

https://www.reuters.com/finance/stoc...hlights/RYM.NZ
Rym 5 year ROE is quoted 23.58
ROE for 2018 23.94

5 year av ROA quoted 7.9%
ROA TTM 8%


As far as I know [could easily stand to be corrected) their ROE has been above 20% since I began holding them in 2013 I will be highly surprised if it plummets anywhere south of 15% over the next few years.

i find the past often (not always) a good predictor of the future.

i can’t speak for the others as I’m not as well acquainted with them.

yield and PE on OCA look good

Unrelated, I see BUPA has started tv advertisements for their retirement villages. Competition heating up.

[percy]

Usually www.4-traders.com figures are good.
I used them as they had the same ratios,which made comparisons easy to understand.
Also for me to work out all the same ratios for OCA,RYM and SUM would take me forever.
Recently I was researching KSL in Australia, and found 4-traders figures were wrong,but that was an exception.