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Why the Summerset (ASX:SNZ) share price is in focus today

ASX share price on watch represented by surprised man with binoculars
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The Summerset Group Holdings Ltd (ASX: SNZ) share price is one to watch today after the release of a fourth quarter trading update from the New Zealand aged care operator.

Why is the Summerset share price on watch?

The Kiwi company operates retirement villages and provides aged care services across New Zealand and is dual-listed on New Zealand’s exchange (NZX). 

Summerset reported 296 sales of occupation rights for the quarter ended 31 December 2020, including 176 new sales and 120 resales.

A sale of occupation rights refers to the sale of the rights to live in an aged care residence for a defined period of time.

The latest fourth quarter 2020 numbers represented the strongest quarterly sales result in Summerset’s 23-year history.

Summerset CEO Julian Cook also noted the strong pipeline of sales ahead in the first quarter of 2021.  Mr Cook said 2021 pre-sales were “encouraging” with strong sales results in many of its new villages.

The Summerset share price has jumped 39.2% higher in the last 12 months, despite coronavirus restrictions. Shares in the Kiwi retirement village operator plummeted in the March 2020 bear market but have recovered strongly.

In fact, the Summerset share price closed last week just shy of its $12.06 record high set on 4 January 2021.

The group currently has a $2.7 billion market capitalisation with a price to earnings (P/E) ratio of 34.1 and a 1.03% dividend yield.

How do Aussie aged care operators stack up?

While the Summerset share price has been surging higher, Aussie aged care shares struggled to climb in 2020.

The Estia Health Ltd (ASX: EHE) share price is down 32.2% in the last year to $1.70 per share ($442.9 market capitalisation).

It was a similar story for fellow ASX-listed competitors Regis Healthcare Ltd (ASX: REG) and Japara Healthcare Ltd (ASX: JHC).

The Regis share price has slumped 25.9% lower in 12 months while Japara shares are down 33.3% to $0.68 per share.

Foolish takeaway

The Summerset share price will be one to watch in early trade after this morning’s strong sales update. 

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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