Wednesday, March 25, 2015

Recent Buy - Omega Healthcare Investors (OHI)

Hi Everyone,

The buys keep coming!  It's been a real busy start to the year and things are not slowing down.  I just got a raise at work, my wife is getting a new job that could potentially earn us a fair bit more money and we recently paid off the last of my student loans.  With all this movement with regards to our finances, we are still saving a good bit of money to invest and hopefully we'll be able to up our investing a bit more!  With this purchase, my wife and I have put a total of around $20,000 to work since the beginning of 2015.  My goal of investing roughly $40,000 is within sight! To think that we are half way to our total is a great feeling since we are just 3 months into the year.   The market continues to stay at elevated levels but there was some recent weakness in REIT's because of the anticipation of rising interest rates.  Well, the Fed did not raise the rates but it gave us an opportunity to buy at lower prices.  With that being said, my next purchase was Omega Healthcare Investors (OHI) so without further adieu...

I purchased 51 shares of Omega Healthcare (OHI) at $39.99.  This purchase adds $110.16 of annual dividends to my account.

I now own 101.651 shares of Omega Healthcare as this was an addition to a previous position which means I am still invested in 33 individual companies.  I may add to this position in the future, or I might just let the position compound for years to come, either way I'm happy.  Forward dividends now stand at around $3,893.98 for the next 12 months. The portfolio will be updated to reflect this purchase.



From Google Finance: Omega Healthcare Investors, Inc. (Omega) is a self-administered real estate investment trust (REIT). The Company invests in income producing healthcare facilities, long-term care facilities located throughout the United States. The Company provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and assisted living facilities (ALFs), independent living facilities and rehabilitation and acute care facilities. The Company maintains a portfolio of long-term healthcare facilities and mortgages on healthcare facilities located throughout the United States. The Company’s investments are operated by a diverse group of established, middle-market healthcare operators.

OHI Chart:


Statistics:

P/E:  14 (based on FFO of 2.85)
Yield:  5.35%
Market Cap:  5.65B
Dividend Growth Rate:  7.5%
Payout Ratio: 76% of FFO
Years of Dividend Growth:  5 years

Omega has been a great investment over the past 11 years.  There was barely even a blip in the chart during the 2008-2009 recession which is a relief when thinking about the future.  They are becoming a notorious quarterly dividend raiser as they are on the 12 straight quarter of raising their dividend.  Do not be alarmed when you see the .36 payout that is scheduled for the 27th because they are merging with Aviv and there will be another payout of .18 next month to equal .54.  Which is .01 above last quarter.

I really wanted to purchase UHT to diversify a little bit more but I did not have the funds ready and since that time, the stock has taken off.  I was going to get in right before their ex-dividend date, but ohh well.  Since I missed UHT, I looked at OHI and the stock has not rallied nearly as much as some of the other REIT's after the decision by the Fed not to raise rates so I pulled the trigger.  The merger is expected to be accretive to earnings and also opens up OHI into new markets/states that they did not have business in before.  A win win.

You can check out all the other purchases I have made for the year on my Stock Purchases and Sells page.

So there you have it, the next building block on the path to the American Dividend Dream!  What do you think, good purchase, bad purchase?  What are you looking to buy next?


2 comments:

  1. Of the entire REIT space I only like the health REITs and among the health REITs I like HCP, VTR and OHI. All three are on my watch list and I think you'll do quite well with OHI long term. To me it looks like a potential buy out candidate among HCP, HCN or VTR as potential acquirers. Thanks for sharing and continued success in reaching your 2015 investing goals.

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    1. Agreed. I think the healthcare REIT's will have many more years of solid growth with the baby boomers getting older by the day. I'm not sure OHI will be a buyout candidate because the market cap is getting quite high. I more or less see them as being acquirers of other small companies. That was one reason I wanted UHT, for the buyout possibility but like I said in the post, it has just rallied too hard recently.

      Thanks for stopping by!

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