The Market place is estimated in the $100s of Billion for assisted care of the senior citizens adding the Baby Boomers, there has been individuals trying to develop a business model to capitilize off the elderly's need. I have a friend who moved Oregon after he retired working for a place locally, he had 40 years of working and got a pension of $3000 a month and he is awesome helping people with dementia, alzheimers and other diseases destorying the diginity of once strong people. Little Larry (He's a big guy) was making $450-$800 a day, this type of care giving can hit almost $12,000 a month for decent resthome.
If any of you are good with people, this is a area you can make a decent wage (You must do it yourself, not go through a cheap ass company who won't pay you your worth) if you go back to college and attend as many local seminars and volunteer while you wait to get certified. My niece is a nurse who makes $140,000 juggling the elderly, she loves people, has a strong inner kind heart so when they die, she knows she did everything to give the people the best experience you can have in a terrible situation. Some people are very good with care-giving but they end up working for somebody instead of trying to get the job themselves, if Larry was working for somebody, he would be making $10 a hour at the most. Instead, he is getting $450-$800 a day for two people depending on the job situation and how much care is needed (hiring a helper during sleep time because you end up living with some of these people all week.).
Care giving jobs don't pay squat if you do not have a degree and often shady people think they can get away with ripping the vulnerable off! I remember a firm that got busted for hiring illegal immigrants to help the elderly with their needs. The group of illegals were paid $4 a hour, while the Firm billed a large amount of cash for their services. Can you imagine the lack of help, how can a Senior who is messed up have their needs meet if their nurse does not speak English?
"Through May, Capital Senior Living shares had doubled in price from a year earlier. However, since then, they've fallen 14%.
That's a buying opportunity.
In fact, the stock, recently at $22.02, could rise over 35% to $30 within a year.
Dallas-based Capital Senior Living (ticker: CSU) runs just over 100 facilities in nearly half of U.S. states—primarily Texas, Ohio and Indiana. Almost all of its business consists of privately paid senior centers, leaving little exposure to Medicare reimbursement cuts or the heightened regulation facing skilled nursing centers. Residency costs an average of just under $2,500 a month at one of its independent living facilities and closer to $3,700 a month for assisted living. That compares with average rents of over $4,000 for rivalsBrookdale Senior Living (BKD) and Emeritus (ESC).
A bad flu season last year led senior housing companies to quarantine some facilities, which reduced new arrivals. The average stay in senior centers is only about three years, so with fewer arrivals, occupancy rates broadly fell, but they're now recovering. JMP Securities analyst Peter Martin, who calls Capital Senior Living a top pick, predicts its occupancy rate will reach 88% by the end of next year from 86.7% in the first quarter of this year. Optimum capacity is over 92%, suggesting plenty of room for further improvement. Management says it can tack 5% a year onto revenues in coming years just through occupancy improvements and rent increases.
Much of the rest of the company's growth comes from acquisitions. Its small size, with a stock market value of just $630 million, gives it an advantage. When larger senior centers go up for sale, they can attract bidding wars from giant real estate investment trusts, which turn rental properties into investor income. Capital Senior Living can focus on privately negotiated deals that are too small to attract REIT attention. Those tend to have more attractive prices and better returns on investment. The size advantage won't last forever, but for now, Capital Senior Living is expected to increase its revenues by 15% this year and 10% next year, while growing its cash flow even faster.
Senior housing might not sound like the most exciting investment, but how does a 30% upside sound? Barron's Jack Hough has details on MoneyBeat. Photo: Getty Images.
Investors who are watching earnings might miss the stock's appeal. It trades at more than 80 times this year's earnings-per-share forecast, because earnings are largely obscured by large depreciation charges. A more telling measure is cash from facilities operations, or CFFO, which is roughly the equivalent of funds from operations, or FFO, for REITS. Capital Senior Living could produce $2 a share in CFFO next year. That's puts the stock at just 11 times CFFO.
Capital Senior Living pays no dividend because management is using the cash it generates to fund growth. Health-care REITs, on the other hand, pay the bulk of their earnings out as dividends. The average one trades at 15 times next year's projected FFO. Capital Senior Living deserves to trade at a similar valuation, because what it lacks for now in dividends it makes up for in fast growth potential. A price of 15 times next year's CFFO of $2 a share would put the stock at $30."
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