The yield on this stock is now closing in on 7% and they've been increasing the dividend like clock work. Ten times in the last 4 years and each of the last 4 quarters. The PE is low relative to its peers and the business is one to take advantage of the aging baby boomers over the next twenty years.
A popular belief is that if the dividend isn't supporting the stock price and the dividend starts to look too good to be true, it usually is. So, can someone please present the case against this stock? There must be something I'm missing and it has to be more than rising interest rates. Doesn't it?
I think the price just went up to far to quickly, and now has pulled back. I had owned a similar company MPW and the price doubled in about a year. MPW has a history of NEVER raising its dividends. I liked it at 10% payout, but not at 5% and sold. I am holding OHI because the increasing dividends will support a higher price.
After I posted my initial post, I thought to look at the long term chart (I get in a habit of just looking at the 12 month chart). Looking at the multi year trend, it is clear that a bubble formed and there is still room for the price to drop further and still be within the rising trend range.
I hate paying too much for a stock, I bought a month or two ago, but see no need to panic at this point.