Lately I have been busy at work, so I haven’t had much of a chance to follow earnings too much. I never even realized OHI was releasing yesterday (10/30).  To my surprise this morning when the market opened, I saw that OHI was down more than 8%!  This was all due to cutting guidance on one of their properties.  As I already own more than 100 shares of OHI, I saw that as a great opportunity to add to my position because I still think this company will do fine in the future.

For those that are unaware, OHI is an owner of properties used in the assisted living sector.  They do not operate the properties themselves, as they just “rent” them out to healthcare operators.  However they are still susceptible to the risks that their tenants face.  Namely Medicaid and other payment reimbursements.  As we don’t know what healthcare will look like in the future, their is still some risk involved.  However, I do strongly believed their will be a high demand for Senior Living Facilities due to the aging baby boomers.

OHI has properties in multiple states across the US, and are in the UK as well, so they do have some geographical diversity working in their advantage. You can read more about them on their website here.

Due to their recent stock drop this morning, I decided added another 20 shares to my position, at a price of $28.79 each, what a bargain as it currently yields north of 9%.  This bringing my total position to 122 shares.  Assuming they still increase their dividend by $0.01 per quarter, that adds $58.52 to my annual dividend income!

What’s your take on OHI?  Great bargain? Value Trap?  Let me know!

Categories: Purchases

6 Comments

Dividend Portfolio · November 1, 2017 at 11:17 am

I don’t own OHI, but I was seriously considering adding it to my portfolio during my last round of buys. I also read the news that OHI went down even as much as 10%, but I also think the fundamentals of the company remains strong and so is the safety of its dividends. This is just one beginner investor’s opinion, however, on the matter.

    Collecting Dividends · November 2, 2017 at 9:12 pm

    Hey Dividend Portfolio,

    I agree the fundamentals remain strong, and I think their dividend is safe to. Can’t complain on a 9% yield!

    -CD

timeinthemarket · November 1, 2017 at 7:16 pm

I read the earnings call and there are some tenant issues that are concerning. The big impairment charge wasn’t great and there were mentions of two operators being behind on payments. The SNF business is tough right now and if these are isolated things then this is probably a good value but I could see the market push it down more unless there’s more clarity around everything.

    Collecting Dividends · November 2, 2017 at 9:11 pm

    Yeah I agree with you that they have issues with some tenants, which is why I only purchased a smaller lot this time around, I don’t plan on purchasing much more in the future as I would be concentrated there. In the mean time I’ll keep collecting their nice dividend.

    Another nice thought is that even if they cut their dividend in half, they’ll still be 5%+.

Damn Millennial · November 1, 2017 at 9:30 pm

That is a big dividend shield! How long do you take to decide on making a purchase? Also what brokerage do you use so fees don’t sting so much?

    Collecting Dividends · November 2, 2017 at 9:08 pm

    Hey DamnMillenial,

    I use Fidelity, so the commission is only $4.95. I usually try to buy about $1k worth of stock at once, so the commission doesn’t add to much onto my cost basis, but I felt the price of OHI was so low that it justified me buying a small lot this time around.

    -CD

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