Omega Healthcare Investors Inc's Dividend Analysis
An In-Depth Look at Omega Healthcare Investors Inc's Upcoming Dividend
Omega Healthcare Investors Inc (NYSE:OHI) recently announced a dividend of $0.67 per share, payable on 2024-02-15, with the ex-dividend date set for 2024-02-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Omega Healthcare Investors Inc's dividend performance and assess its sustainability.
What Does Omega Healthcare Investors Inc Do?
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Omega Healthcare Investors Inc is a healthcare facility real estate investment trust that invests in the United States real estate markets. Omega's portfolio focuses on long-term healthcare facilities. The company maintains dual goals of increasing its returns to investors while also maintaining a high level of care for residents. Omega works to obtain contractual rent escalations under long-term leases, along with fixed-rate mortgage loans. The company considers merger and acquisition investment as a component of its operational growth strategy.
A Glimpse at Omega Healthcare Investors Inc's Dividend History
Omega Healthcare Investors Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis.
Omega Healthcare Investors Inc has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 21 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Omega Healthcare Investors Inc's Dividend Yield and Growth
As of today, Omega Healthcare Investors Inc currently has a 12-month trailing dividend yield of 9.09% and a 12-month forward dividend yield of 9.09%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Omega Healthcare Investors Inc's annual dividend growth rate was 0.40%. Extended to a five-year horizon, this rate increased to 0.90% per year. And over the past decade, Omega Healthcare Investors Inc's annual dividends per share growth rate stands at 4.80%.
Based on Omega Healthcare Investors Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Omega Healthcare Investors Inc stock as of today is approximately 9.51%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Omega Healthcare Investors Inc's dividend payout ratio is 5.27, which may suggest that the company's dividend may not be sustainable.
Omega Healthcare Investors Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Omega Healthcare Investors Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Omega Healthcare Investors Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Omega Healthcare Investors Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Omega Healthcare Investors Inc's revenue has increased by approximately -4.90% per year on average, a rate that underperforms than approximately 75.24% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Omega Healthcare Investors Inc's earnings increased by approximately -25.10% per year on average, a rate that underperforms than approximately 84.12% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -14.10%, which underperforms than approximately 85.03% of global competitors.
Concluding Thoughts on Omega Healthcare Investors Inc's Dividend Outlook
In conclusion, while Omega Healthcare Investors Inc boasts a commendable history of consistent dividend payments and a high yield, investors should cautiously consider the sustainability of such dividends. The company's low dividend growth rate and payout ratio pose questions about future increases, especially when weighed against its profitability and growth metrics. While the profitability rank is strong, the negative growth in revenue, EPS, and EBITDA over recent years could be a concern. Value investors should closely monitor these factors to determine if Omega Healthcare Investors Inc can maintain its status as a reliable dividend-paying stock.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
