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!