Investment Thesis – Omega Healthcare Investors Inc. (OHI)

  • Omega is a quality high dividend yield healthcare REIT. Omega maintains a portfolio of healthcare facilities and mortgage of healthcare facilities located in (mainly) US and UK.
  • Consistent dividend growth over 22 consecutive months.
  • The aging population in US provides an opportunity for growth in Omega. Its portfolio consists mostly of high quality SNFs (Skilled Nursing Facilities) and they are currently adapting their facilities to cater to this trend.
  • As dictated by Omega’s investment evaluation criteria, Omega’s facilities are operated by high quality and well-experienced middle-market healthcare operators.
  • Rents collected are secure and bound long term contractually. All operational risks are borne by operators and not by Omega.

  • In the current environment of high inflation, the possibility of rising interest rates could affect the economy and Omega’s debt position.
  • With the high possibility of a coming economic downturn (bear market), there is a chance for better valuations to buy the business.

  • Overall, I am looking to hold a 4% position in this business. Am currently waiting for more attractive valuations before buying the stock.
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