Another Wall street myth - if there's a PR on a Friday afternoon after hours, especially on a holiday weekend, it's going to be bad news. Plus it was a Friday the 13th!
If a dividend increase is bad news, I can't wait for the good news! This has been a very profitable stock for me.
Dan did a nice job. This is one company that I don't spen a lot of time on. I do keep an eye on their lessors - but in general trust management to do what is correct to give me the best return for my money.
"I'm a retired investor so unfortunately don't have access to a fancy crystal ball. But I do have an old calculator that works well enough for some fairly simple math"
love it -
simply put - they can afford to continue to increase the divi by 1 cent each quarter all year - makes investors happy - keeps PPS up - gives them flexibility in future years to increase the divi even if they don't have a stellar quarter.
Excellent analysis-- very often as you know people express their stock predictions on simply a feeling. I am also retired- I have been investing in HREITS for about 8 years and I'm very pleased with their results.
That's a very good question about the payout ratio, but it's complicated by the fact that OHI reports FFO with a number of adjustments so FFO is all over the map. FWIW, I came up with $1.75 of FFO for 2011 and a payout ratio of 88%, but others may differ.
For 2012, I'm starting with the current consensus estimate of $2.05 and thinking dividends will probably fall out between $1.75 and $1.80, but we'll see. Either way, I think the dividend will have to go up from here and by a decent amount.
I think OHI will need to increase its dividend at least once in 2012 and perhaps more than that. The midpoint of management's 2012 FFO guidance is $2.03 ($150 million of new investments), and analyst consensus is $2.05 (something like $300 million of investment). But the current dividend run-rate is only $1.64, which implies a payout ratio of 80%. That's probably too low. Even if you assume a payout ratio of 88%, that would mean a dividend of about $1.80 for the year. Since the first quarter is already struck at $0.41, that means the average for the remaining 3 quarters needs to be $0.46, which is a 12% increase.
OHI should have some decent earnings growth this year, good opportunity to both increase the dividend and take the payout ratio down.