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1. Company Snapshot

1.a. Company Description

Extendicare Inc., through its subsidiaries, provides care and services for seniors in Canada.The company offers long term care (LTC) services; retirement living services; and home health care services, such as nursing care, occupational, physical and speech therapy, and assistance with daily activities, as well as contract and consulting services to third parties.It operates a network of 119 LTC homes and retirement communities, as well as home health care operations under the Extendicare, Esprit Lifestyle Communities, ParaMed, Extendicare Assist, and SGP Purchasing Partner Network brands.


Extendicare Inc.was founded in 1968 and is based in Markham, Canada.

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1.b. Last Insights on EXE

Extendicare's recent performance has been positively influenced by its consistent dividend payments, with the company declaring a cash dividend of C$0.042 per common share for September and October 2025. Additionally, the company is set to release its Q3 2025 financial results on November 11, 2025, which may provide insight into its operational performance. The upcoming earnings release and conference call may also drive investor sentiment. According to recent announcements, the company's financial health and commitment to shareholder returns remain intact.

1.c. Company Highlights

2. Extendicare's Strong Q3 2025 Earnings Driven by Organic Growth and Strategic Acquisitions

Extendicare Inc. reported a robust financial performance in its third-quarter 2025 results, with adjusted EBITDA increasing to $50.8 million, up 40.6% from the prior year, and adjusted EBITDA per share growing by 36.6% to $46.9 million. The company's AFFO per share also saw a significant increase, rising to $0.31, up 19.3% year-over-year, driven by strong results and a payout ratio of 45%. The actual EPS came out at $0.281, beating estimates of $0.197. The Home health care segment was a key driver of this growth, with volumes increasing by 13% year-over-year and NOI margin improving by 230 basis points to 13.6%.

Publication Date: Nov -29

📋 Highlights
  • Acquisition-driven Growth:: Closing the Gap acquisition added $24M revenue and $3.1M NOI to Home health care, exceeding expectations with 13% YoY volume growth and 230 bps margin improvement to 13.6%.
  • Financial Outperformance:: Adjusted EBITDA surged 40.6% to $50.8M, with EBITDA per share rising 36.6% to $46.9M, while AFFO per share increased 19.3% to $0.31 (45% payout ratio).
  • LTC Margin Expansion:: Long-Term Care NOI margin improved 40 bps to 11.8%, supported by 1,408 new beds in development (replacing 1,097 Class C beds) via a $565M joint venture with Axium.
  • Home Health Momentum:: 13% YoY volume growth in Home health care, 48,000 LTC waitlist in Ontario driving demand, and 50-55% margin expansion forecast for Managed Services.

Segmental Performance

The Long-Term Care segment also saw an improvement in NOI margin, which increased by 40 basis points year-over-year to 11.8%. The company has six homes under construction, which will bring 1,408 new state-of-the-art beds into service, replacing 1,097 Class C beds. The $565 million development cost is being funded through a joint venture with Axium, where Extendicare retains a 15% managed interest. Management believes that the scalable back office helps make acquisitions immediately accretive, realizing synergies from running higher volumes through its cloud-based technology platform.

Growth Prospects and Challenges

The company is seeing opportunities for acquisitions in the Home health care space, with a focus on organizations that provide geographic reach or service lines that complement its existing business. Extendicare does not see labor supply as a significant constraint due to its in-house training programs and partnerships with colleges. However, the company does face staffing challenges in certain regions, particularly rural areas, where it struggles to find nurses, physiotherapists, and certain registered staff.

Valuation and Outlook

With a strong balance sheet and growing cash flow, Extendicare has flexibility to pursue strategic growth through acquisitions. The company's valuation metrics, including a P/E Ratio of 20.87 and an EV/EBITDA of 11.69, indicate a relatively high valuation. Analysts estimate next year's revenue growth at 13.8%, which may justify some of the premium valuation. The company's ROE of 64.97% and ROIC of 18.6% are also indicative of its strong profitability.

Dividend and Yield

Extendicare's Dividend Yield stands at 2.5%, which may be attractive to income investors. The company's ability to sustain its dividend payments is supported by its strong AFFO per share and a payout ratio of 45%.

3. NewsRoom

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Extendicare Announces October 2025 Dividend of C$0.042 per Share

Oct -15

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Extendicare Announces Timing of 2025 Third Quarter Results and Conference Call

Oct -07

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Extendicare Announces September 2025 Dividend of C$0.042 per Share

Sep -15

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Extendicare Outperform Rating Confirmed and Target Raised at National Bank

Aug -08

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Should You Investigate Extendicare Inc. (TSE:EXE) At CA$12.66?

Aug -07

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Extendicare Announces 2025 Second Quarter Results

Aug -06

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Extendicare Gets Outperform Rating and $15.40 Target Price in New Coverage From National Bank of Canada

Jul -17

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Extendicare Announces July 2025 Dividend of C$0.042 per Share

Jul -15

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.63%)

6. Segments

Long-term Care

Expected Growth: 2.5%

Extendicare Inc.'s Long-term Care segment growth of 2.5% is driven by increasing demand for senior care services, aging population, and government initiatives to support elderly care. Additionally, the company's strategic expansion into new markets, investments in technology, and focus on quality care also contribute to this growth.

Home Health Care

Expected Growth: 2.8%

Extendicare Inc.'s Home Health Care segment growth of 2.8% is driven by an aging population, increasing demand for cost-effective healthcare solutions, and government initiatives promoting home-based care. Additionally, the company's strategic acquisitions and investments in technology, such as telehealth platforms, have enhanced its service offerings and expanded its reach.

Managed Services

Expected Growth: 3.2%

Extendicare Inc.'s Managed Services segment growth of 3.2% is driven by increasing demand for home healthcare, aging population, and government initiatives to shift care from hospitals to community-based settings. Additionally, the company's strategic partnerships, investments in technology, and expansion of service offerings have contributed to the growth.

7. Detailed Products

Long-Term Care

Extendicare provides long-term care services to elderly individuals who require ongoing medical and personal care.

Home Health Care

Extendicare offers home health care services, providing medical and non-medical care to individuals in the comfort of their own homes.

Assisted Living

Extendicare's assisted living services provide support with daily living activities, such as bathing, dressing, and medication management.

Memory Care

Extendicare's memory care services provide specialized care and support for individuals living with Alzheimer's disease and other dementias.

Rehabilitation Therapy

Extendicare offers rehabilitation therapy services, including physical, occupational, and speech therapy, to help individuals recover from illness or injury.

Palliative Care

Extendicare's palliative care services provide comfort and support to individuals with serious illnesses, focusing on pain and symptom management.

8. Extendicare Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Extendicare Inc. is moderate due to the availability of alternative healthcare services and products.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of negotiating power and the importance of healthcare services to customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the availability of alternative suppliers and the importance of quality healthcare services.

Threat Of New Entrants

The threat of new entrants is high due to the growing demand for healthcare services and the relatively low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the healthcare industry and the presence of established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 77.19%
Debt Cost 8.37%
Equity Weight 22.81%
Equity Cost 10.07%
WACC 8.76%
Leverage 338.49%

11. Quality Control: Extendicare Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Extendicare

A-Score: 7.3/10

Value: 5.0

Growth: 7.4

Quality: 6.0

Yield: 7.0

Momentum: 9.0

Volatility: 9.3

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Sienna Senior Living

A-Score: 6.3/10

Value: 3.9

Growth: 6.1

Quality: 3.0

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

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NHC

A-Score: 5.9/10

Value: 5.4

Growth: 4.8

Quality: 6.5

Yield: 5.0

Momentum: 6.0

Volatility: 8.0

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Cryo-Cell International

A-Score: 4.8/10

Value: 6.4

Growth: 3.7

Quality: 6.4

Yield: 8.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

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Addus HomeCare

A-Score: 4.7/10

Value: 3.6

Growth: 7.8

Quality: 6.6

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
ASHS

A-Score: 3.8/10

Value: 9.6

Growth: 4.6

Quality: 3.5

Yield: 0.0

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.08$

Current Price

22.08$

Potential

-0.00%

Expected Cash-Flows