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Thursday, April 30, 2015

Recent Buy: Omega Healthcare Investors Inc

Apr 22, 2015: Bought 65 shares of OHI at $38.46 per share.

Omega Healthcare Investors Inc (NYSE:OHIis a self-administered REIT (real estate investment trust) that invests in income-producing healthcare facilities located throughout the United States. The company provides lease or mortgage financing to healthcare operating companies, funding investments through loans under revolving credit facilities, from private or public offerings of debt or equity securities, or through secured indebtedness.

OHI is a Dividend Contender with a 13-year streak of consecutive dividend increases. It pays quarterly dividends of 54¢ per share in the months of February, May, August, and November.

My buy price results in an initial yield on cost (YoC) of 5.62%, which is high due to the fact that REITs have to pay at least 90% of taxable income in the form of shareholder dividends.

This post is a placeholder for a more thorough analysis of OHI. I'm busy developing a set of selection criteria similar to those for regular stocks and master limited partnerships (MLPs) on my About page

65 shares of OHI adds $140.40 to DivGro's projected annual dividend income. I've updated my portfolio to reflect this purchase.

What do you think of OHI?

26 comments :

  1. I can't decide: OHI, WPC or DPS. Im leaning heavily towards OHI with this pullback.

    Congrats on adding $140 to your dividend total!!

    ReplyDelete
    Replies
    1. Of those, I like OHI best, even though WPC has a slightly better yield and a longer history of dividend growth. At below 3% yield, I don't think DPS compares (if you're looking at yield).

      Anyway -- that's just me... you got to make up your own mind :-)

      Delete
  2. Great purchase, FerdiS. OHI occupies one of the largest positions in my portfolio and its a terrific company. Love the quarterly dividend raises from them. This will do well for your portfolio. Good to have you as a fellow investor.

    R2R

    ReplyDelete
    Replies
    1. My timing was not so great, but I'm happy enough. Over time, the small hiccup of the few days will be forgotten and I'll be raking in the dividends. If OHI continues to drop, I may just pick up more shares!

      Happy to join you as a fellow shareholder!

      Cheers
      FerdiS

      Delete
  3. Hi FerdiS
    Nice acquisition, I also added OHI to my portfolio a few days ago.
    Best Wishes,
    DH

    ReplyDelete
    Replies
    1. Glad to join you as a shareholder. I hope OHI continues to deliver the stellar performance and dividend payments well into the future. Good luck!

      FerdiS

      Delete
  4. Great buy. OHI has been one of my best performers over the last 12-months. You got in at a good price.

    ReplyDelete
    Replies
    1. Excellent that you've been a shareholder over the last year... I'm glad to join you and hope OHI continues to deliver similarly in future!

      Take care!

      Delete
  5. Hi FerdiS,
    nice purchase! I also added OHI to my portfolio last month. Together with HCP, I think I covered the sector very well. We'll see how the Ventas spinoff(SpinCo) will affect the market shares of OHI in the future.
    Best of luck!

    ReplyDelete
    Replies
    1. Hi DivRider -- thanks for commenting. Seems like several dividend growth investors are dipping into the REIT sector. I've done so myself this year with a couple of purchases. And you're right, the Ventas spinoff will be interesting to monitor.

      Cheers
      FerdiS

      Delete
  6. Hi FerdiS,

    Nice purchase! OHI was near the top of my list when deciding on a healthcare REIT for my IRA. I ended up picking Ventas instead, but I don't remember why off the top of my head.

    I actually hadn't heard of the spinoff prior to reading about it here. Sounds like Ventas shareholders will receive 1 share of SpinCo for every 4 shares of Ventas. Also, the number of Ventas shares owned will not change as a result of the distribution. Additionally, management confirmed that the combined dividend is expected to increase by at least 10%. This sounds like a pretty good deal to me!

    ReplyDelete
    Replies
    1. Hi Scott -- thanks for visiting. VTR looks like an interesting alternative. I'll have to look into it in more detail, as I haven't done any thorough analysis on it yet.

      Sounds like the spinoff will reap some quick benefits for shareholders... that's great -- congratulations!

      Cheers
      FerdiS

      Delete
  7. Great move here, I recently bought some OHI myself. I'm hoping we get a chance to double down at some point with all the interest rate scares. Best wishes and thanks for sharing!

    ReplyDelete
    Replies
    1. I noticed your purchase -- congratulations. Glad to be a fellow shareholder. My timing was not all that good, but, as you say, perhaps we'll get a chance to "double down' and get in at a better average yield on cost. Take care!

      Delete
  8. Ferdi,

    Nice buy. OHI is one of the best out there across the board in terms of operating metrics, yield, and dividend growth. I'm a very happy shareholder.

    I'm likely going to add to my WPC position, especially since OHI is already a decent holding for me. But OHI is a great stock to buy/own here.

    Enjoy that extra dividend income!

    Cheers.

    ReplyDelete
    Replies
    1. Hi Jason -- thanks for stopping by. Just read your account of the Berkshire Hathaway conference. Pretty cool stuff!

      WPC looks like a good buy right now (although I haven't done a full analysis yet). Its nearly at a 6% yield. Looks like a great opportunity to jump in with more shares!

      Glad to finally be on board with OHI.

      Take care
      FerdiS

      Delete
    2. Hi Jason -- thanks for stopping by. Just read your account of the Berkshire Hathaway conference. Pretty cool stuff!

      WPC looks like a good buy right now (although I haven't done a full analysis yet). Its nearly at a 6% yield. Looks like a great opportunity to jump in with more shares!

      Glad to finally be on board with OHI.

      Take care
      FerdiS

      Delete
  9. Such a great company at good valuation. Not to mention strong dividend. Great job!

    ReplyDelete
    Replies
    1. Thanks BeSmartRich -- I agree: great company, good valuation, strong dividends. That's why I like the stock and will like it even more if it comes down a little bit more.

      Cheers
      FerdiS

      Delete
  10. Nice purchase! It seems that I have to do my due diligence on REIT. Thanks for sharing.

    All the best,
    MU

    ReplyDelete
    Replies
    1. Hi Money Unbinding -- I'm doing the same... I've been looking into REITs lately and there are some interesting opportunities to be had. Take care and good luck perusing REIT land.

      Cheers
      FerdiS

      Delete
  11. Liking the health REIT space and OHI. I just started into this space last week with my buys into the big three with VTR, HCP and HCN but also have OHI, NHI and LTC on my radar. I know the smaller health REITs can offer more growth than the big boys but I wanted to get my feet wet with those first as well as look into other REITs such as DLR, O and WPC. Thanks for sharing.

    ReplyDelete
    Replies
    1. Those seem to be great buys -- I need to take a look at VTR, HCP and HCN. I own DLR and O. I just noticed Dividend Mantra added to his holdings of WPC. The REIT space seems to be interesting right now and potentially quite lucrative if further interest rate scares drive prices down even further. Thanks for commenting and best of luck with your portfolio!

      Delete
  12. OHI has been quite popular lately and we wouldn't expect less with good fundamentals!

    Good buy!

    Mike

    ReplyDelete
    Replies
    1. I've invested in a number of REITs now, despite not really having developed a good set of selection criteria. REITs truly are different and need to be valued differently. I'm slowly formulating an approach and reading a lot of valuations by other investors. The tickers you mention are all on my radar, too. Of course, I already own shares of DLR, PMT, O, STWD, and now OHI.

      Delete
    2. I'm not a pro when it comes to REITs. You are right, they need to be valued differently and maybe that's another reason why I've never been much into them: I'm now comfortable with my dividend investing rules! ;-)

      Please share your method when you set one!

      Cheers!

      Mike

      Delete

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