MENU

Is the Japara Healthcare Ltd (ASX:JHC) share price a buy?

The Japara Healthcare Ltd (ASX: JHC) share price is at the lowest it has been in 2018. It’s worth considering if it is a buy today.

It’s one of the largest aged care providers in Australia and has pleasing tailwinds due to the ageing demographics of Australia.

The company recently acquired Riviera Health, which included four operating aged care facilities at Chatswood, Doonside, Brighton-Le-Sands and Wyong, a near completed replacement facility at Brighton-Le-Sands, 239 surplus bed licenses and other real estate assets.

Since the acquisition, Japara has implemented its operating standards in all the operating homes, as well reconfiguring the homes by converting multiple bed wards into single rooms.

Japara has also received full re-accreditation at the Wyong and Doonside homes after the Department of Health had previously sanctioned the previous owner. Japara met all 44 of the Australian Aged Care Quality Agency expected outcomes.

The Japara CEO, Me Andrew Sudholz was pleased with how quickly Japara received accreditation considering the short amount of time the company owned the new locations.

This purchase enables Japara to start a portfolio of ‘premium’ newly built aged care homes in Sydney.

Me Sudholz said that the acquisition for $39 million was exceptional value because Japara purchased four operating homes for little cost due to the expected cash receipts from the refundable accommodation deposits at the new Brighton-Le-Sands home, the value of the surplus licenses and the other real estate acquired.

The four Riviera Health operating homes are expected to provide an operating earnings before interest, tax depreciation and amortisation (EBITDA) uplift of between $3.5 million to $4 million.

Foolish takeaway

Japara is currently trading at around 17x FY17’s earnings. Japara is a tough one to judge because of how dependent it is on a supportive government. However, it does appear good value for how earnings will come online over the next three years.

Unconvinced about Japara? These top stocks are even more likely to deliver growth.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of JAPARA DEF SET. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!