Aged Care – regulatory environment masks the opportunity

Morgans Financial Limited

Morgans Financial Limited

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The industry remains highly fragmented despite the recent acquisition activity (Regis acquiring the Masonic portfolio and Japara acquiring the Profke portfolio). The changes announced will put additional pressure on the business models of all operators, but in particular, the weaker operators will become less viable. This provides an opportunity for the well-run operators like Regis and Japara. We believe the current share prices of both providers account for the uncertainty surrounding the budget cuts and we can see share prices moving up by approximately 10% into the August reporting season. Both companies offer a reasonable yield of approximately 4% fully franked. We recommend clients add either Japara or Regis to their portfolios.

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Morgans Financial Limited
Stockbroker
Morgans Financial Limited

Morgans is Australia's largest national full-service retail stockbroking and wealth management network with over 240,000 client accounts, 500 authorised representatives and 950 employees operating from offices in all states and territories.

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