2024-05-21 15:00:00 ET
Summary
- Omega Healthcare Investors focuses on long-term care and skilled nursing facilities, which are expected to see increased demand as the US population ages.
- OHI's dividend has been the subject of debate, but management projects that the large yield is secure and will continue at $2.68 per share annually.
- OHI's Q1 2024 results showed growth in revenue, net income, and funds from operations, indicating strong performance and execution by senior leadership.
Omega Healthcare Investors, Inc. ( OHI ) has been one of my long-time favorite real estate investment trusts ((REIT)) because it focuses on long-term care ((LTC)) and skilled nursing facilities ((SNF)). The demand for SNF facilities is expected to increase over the next decade to the point where occupancy rates will outpace capacity, causing growth opportunities to bring on additional supply. Unlike the retail industry, where e-commerce is impacting brick-and-mortar locations, OHI will see a growing need for their locations as the U.S. population ages. OHI stopped providing investors with annualized dividend increases during the pandemic after increasing the dividend annually from 2004 to 2020. As some of its operators faced severe hardships from the pandemic, OHI's dividend has been the subject of debate. I don't believe management is getting enough credit for keeping the company afloat during an unprecedented time, and no matter what they have done, some still believe that the safety of OHI's dividend is at risk. OHI is an income investment for me, and I have been a shareholder since the end of 2017. On the recent earnings call, senior leadership provided more insight into the dividend, and I believe that their projections indicate that the large yield is secure and that OHI will continue paying $2.68 per share in annualized dividends. Suppose you're an income investor who is interested in the healthcare side of REITs. In that case, OHI is compelling because LTC and SNFs are likely to see more capital flowing into them as the population ages. Over the past decade, shares of OHI have seesawed and are currently red over the past decade, but if you're looking at this as an income play, its price fluctuation isn't the red flag some make it out to be....
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Omega Healthcare: Clarity Regarding The Dividend Makes This 8.75% REIT Interesting