Ushering in good news for its shareholders, Omega Healthcare Investors Inc. (OHI) announced a 1.9% hike in its quarterly dividend rate to 53 cents from 52 cents paid earlier. The new dividend will be paid on Feb 16, 2015 to shareholders of record as on Feb 2.
Shares of Omega Healthcare also scaled a new 52 week high, touching $43.56 during the regular trading session on the NYSE on Jan 14. Notably, the stock closed at $ 43.40, reflecting a gain of 46.9% over the past one year.
This reflected positive investors’ sentiments and the broader REIT market was optimistic as well, driven by expectations for a continued low rate environment for some more time given the modest growth pace of the economy.
Based on the increased rate, the annualized dividend comes at $2.12 per share, resulting in an annualized yield of about 4.88%, considering Omega Healthcare's closing price of $43.40 on Jan 14.
Omega Healthcare has been consistent in enhancing its shareholder’s wealth with dividend payouts. In fact, this healthcare real estate investment trust’s (“REIT”) latest dividend hike marks its 10th consecutive increase.
We believe that Omega Healthcare’s dividend hike demonstrates its solid cash flow generating capabilities. Notably, aided by revenue growth, the company’s third-quarter adjusted funds from operations (“FFO”) per share of 73 cents exceeded the Zacks Consensus Estimate by 5.8%.
In the third quarter, Omega Healthcare revealed a definitive agreement with Aviv REIT, Inc. (AVIV), under which it would acquire Aviv in an all-stock deal worth $3 billion. Poised to create a $10 billion skilled nursing facility (“SNF”) REIT in the country, the deal is expected to close in the first quarter of 2015.
As a matter of fact, solid dividend payouts are arguably the biggest attraction for REIT investors. In addition to Omega Healthcare, a number of other REITs came up with dividend hike announcements, of late.
This week, Chatham Lodging Trust (CLDT) announced a 25% hike in its monthly dividend rate to 10 cents from 8 cents paid earlier while DDR Corp. (DDR) announced an 11% hike in its quarterly dividend.
Omega Healthcare currently carries a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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