5 LTC Facilities Stock Price Upsides Are 20% To Over 30%

Includes: ACC.TO, CSU, ESC, FVE, SKH
by: Fredrik Arnold

Chances are you'll never need long-term care (LTC). However, if you do need it LTC won't be cheap and your family can't provide it all. There just two major triggers to tell your need for long-term care: (1) physical impairment (needing assistance with any two of bathing, eating, dressing, toileting, or transferring from bed to chair); (2) cognitive impairment (dementia or alzheimer disease). There are two places to have your care delivered: (1) at your home; (2) in a facility. Your investment in an LTC facility stock now may perhaps pay you back in future gains of 20% to 30% to cover your care if you ever need it. Here are five such stocks with promising upsides:

The chart above used the one-year mean target price set by brokerage analysts matched against August 6 closing price to compare 5 LTC Facilities stocks showing the highest upside price potential into 2014. These were: Capital Senior Living (NYSE:CSU) operating 101 senior living communities and one home care service in 23 U.S. states, which led the pack with a 33.8% price gain; Emeritus Corp. (NYSE:ESC) showed 30.9% upside; Five Star Quality Care (NYSE:FVE) showed a 23.7% price upside; Amica Mature Lifestyles (ACC.TO) showed 20.7% upside; Skilled Healthcare (NYSE:SKH) showed a 19.9% price upside.

The number of analysts providing price estimates was noted after the name for each stock. Three to nine analysts were considered optimal for a valid mean target price estimate.

Wall Street Wizards Work Out A 25.2% Average Net Gain from 5 LTC Facilities Stocks By 2014

Five YCharts picks were graphed below to show relative strengths by dividend and price as of August 6, 2013, and those projected by Yahoo Finance analyst mean 1-year target estimates to the same date in 2014.

A hypothetical $1000 investment in each stock was divided by the current share price to find the number of shares purchased. The shares number was then multiplied by projected annual per share dividend amounts to find the dividend return. Thereafter the analyst mean target price was used to gauge the stock price upsides and net gains including any dividends less broker fees as of 2014.

Historic prices and actual dividends paid from $1000 invested in the five stocks and the aggregate single share prices of those stocks created data points for 2013. Projections based on estimated dividend amounts from $1000 invested in each of the five highest-yielding stocks and aggregate one-year analyst target share prices from Yahoo Finance created the 2014 data points. The green line showed price and blue showed dividend.

Click to enlarge

YCharts projected a 9.5% lower dividend from $10K invested in this group while aggregate single share price was projected to increase over 9.4% in the coming year. The number of analysts contributing to the mean target price estimate for each stock was noted in the next to the last column on the chart. Three to nine analysts was considered best for a valid projection estimate.

A beta (risk) ranking for each analyst rated stock was provided in the far right column on the chart above. A beta of 1 meant the stock's price would move with the market. Less than 1 showed less than market movement. Higher than 1 showed greater than market movement. Negative numbers show movement the opposite of market direction.

Five LTC Facilities Stocks Net 17.9% to 33.9% by July 2014

Five possible profit generating stock trades from $1k invested in each revealed by YCharts and Yahoo Finance for 2014 were:

Click to enlarge

Capital Senior Living netted $338.85, based a mean target price estimate by nine analysts less $20 in broker fees. A Beta number was not available.

Emeritus Corp. netted $289.45 based on a mean target price estimate from six analysts less $20 in broker fees. The Beta number showed this estimate subject to volatility 2% less than the market as a whole.

Amica Mature Lifestyles netted $235.81 based on a mean target price estimate from eight analysts combined with projected annual dividend less $20 in estimated broker fees. A Beta number was not available.

Five Star Quality Care netted $216.75, based on mean target price estimates from four analysts less the usual broker fee. The Beta number showed this estimate subject to volatility 70% greater than the market as a whole.

Skilled Healthcare netted $179.20 based on a mean target price estimate from six analysts less the broker fees. The Beta number showed this estimate subject to volatility 100% more than the market as a whole.

The average net gain in dividend and price was 25.2% on $5k invested ($1k each) in these five stocks. This gain estimate was subject to average volatility 56% greater than the market as a whole.

The stocks listed above were suggested only as decent starting points for your stock purchase research process. These were not recommendations.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.