Dividend increase Omega Healthcare Investors (OHI)

The 4th dividend increase of Omega Healthcare Investors in 2017.

This week OHI announced a 1.6% increase in its quarterly dividend.

It was the 21th consecutive dividend increase. The dividend is raised from $0.64 to $0.65. The dividend pay date is November 15, 2017 to shareholders of record on October 1, 2017 (ex dividend October 30, 2017).



Vrijheid Fonds

The new dividend amount represents an annualized dividend amount of $2.60 per share, up from $2.56. The dividend yield on current price is 8.27%.

My Vrijheid Fonds consist of 144 shares of OHI, so my annual dividends will increase by $4.90 (after taxes).

My projected annual (2017) total amount from my shares of OHI will be €278.40 after taxes.

DGI at work! I love it!



13 thoughts on “Dividend increase Omega Healthcare Investors (OHI)

  1. KeithX

    Pollie, are you concerned about changes from the US government that could affect OHI’s tenets? Our President is a big variable and that could cause problems for REITs such as OHI that are heavily reliant on payments from the government. I sold my shares of OHI earlier this year and invested in PSA. PSA gets a Valueline safety rating of 1 (highest) and is insulated from regulatory, congressional, and presidential whims.
    Be blessed,

      1. KeithX

        Pollie, did you read the earning call transcript of listen to the call? Here are some things that I am concerned with:

        Taylor Pickett:

        “During the third quarter, we cooperatively completed the transition of Orianna’s Texas facilities to another Omega operator, and we completed the sale of the Northwest facilities to two buyers. Unfortunately, the remaining portfolio continues to underperform and Orianna continues to apply free cash flow to pay down past due vendors and other obligations.

        “We are in active discussions with Orianna’s owners and consultants regarding the potential transition and/or sale of certain assets versus a federal or state court restructure. We are hopeful, we can develop an out-of-court plan, which if successful, would likely result in cash rents of $32 million to $38 million per year, as compared to the current annual contractual rent of $46 million.”

        Jeff Marshall:

        “Significant legislative and regulatory activity impacting SNFs continued over the past few months, with the industry escaping the adverse consequences of potential federal Medicaid payment reform legislation and benefiting from CMSs curtailment of certain mandatory bundling programs.

        “As to legislative activity, congressional efforts to repeal and replace the Affordable Care Act, which consistently provided for the reduction of future federal Medicaid funding to states extended through September, but ultimately failed.

        “Following the Senate’s failure in July to pass the better Care Reconciliation Act, Senate Republican leaders unsuccessfully attempted to push through the Health Care Freedom Act also known as skinny repeal, hoping for a Reconciliation Conference with the House on its previously passed American Health Care Act. Without sufficient votes for skinny repeal, Senate Republicans focused on their final repeal replace hope for the fiscal year called, The Graham-Cassidy Bill.

        “For SNFs, commencing in 2020, this bill would have reduced the maximum provider tax assessment from 6% to 4% of revenues, costing SNFs in 35 affected states an average of 200,000 per year and would have replaced the existing Federal Medicaid match funding program with a capped per capita funding program that would not have protected Federal Medicaid funding levels for the elderly disabled from state budget allocations toward other Medicaid populations.

        “Fortunately, for the SNF industry, the Graham-Cassidy bill failed to garner sufficient Republican support at the end of September to even bring it to a floor vote, a situation heavily influenced by the unified lobbying opposition of the entire healthcare industry. A staunch Democratic opposition to any ACA repeal replace efforts.

        “If Senate Republicans are to succeed in any future such efforts, they must use the single annual budget reconciliation opportunity under parliamentary procedure that allows for passage with a simple majority vote. A process that likely will be reserved for Senate Republican tax reform efforts currently underway.

        “The risk to the SNF industry is that, Medicaid and/or Medicare funding reductions might be included as a pay for in tax reform legislation. The Republicans would then face the same party objections that have stalled repeal replace efforts to-date. In other legislative activity, committees in both the House and Senate announced late last week that a Bipartisan Bicameral agreement had been reached to permanently eliminate Medicare Part B. Therapy caps effective January 1, 2018. Legislation to effect this positive change for the industry is expected to pass this quarter.”

        “Finally, the resignation of industry-friendly Department of Health and Human Services Secretary, Tom Price, raises the question of whether his successor will continue the largely favorable treatment of SNF industry issues strongly supported by current CMS administrator, Seema Verma, a potential successor.”

        Daniel Booth:

        “In addition to Orianna, we continue to experience specific operator performance issues, as discussed in our last several calls, including Signature Healthcare, another top 10 operator. In both cases, liquidity issues are impacting the ability of these operators to pay rent on a timely basis.

        “The first operator, Orianna, has fallen significantly behind on rent, and as a result, has been placed on a cash basis accounting, as previously discussed by both Taylor and Bob. While we have endeavored to assist Oriannain streamlining operations by transitioning both their Northwest and Texas regions, the overall portfolio continues to struggle and past due rent has grown.”

        “Our second top 10 operator, Signature Healthcare, has also fallen further behind on rent in the third quarter predominantly as a result of anticipated tightening restrictions upon their borrowing base by their working capital lender, thus reducing availability. At this time, it is important to note that the vast majority of Signature’s past due rent balance is covered by a letter of credit in excess of $9 million.”

        “In addition to the Orianna and Signature ongoing restructure efforts, we have one other non top 10 operator that has fallen behind on rent, and that has required future rent payments to be placed on cash basis accounting.”

        Sorry for the long reply! I found the transcript to be enlightening, and was happy that OHI’s management didn’t try to sugar coat the problems, but there are indeed problems. I sold our shares of SNF REITs when Ventas (VTR) spun-off Care Capital Properties (CCP). I know that there are many investors that would disagree, but I am always concerned that the businesses being divested are of lesser quality than those that are kept.

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