As part of its continuing efforts to enhance stockholder
Omega Healthcare Investors Inc.
) hiked its quarterly cash dividend by 2.1% to 48 cents per share
from 47 cents paid in the last quarter. Notably, this depicts the
dividend hike since first-quarter 2004. The new dividend will be
paid on Nov 15, 2013 to shareholders of record as of Oct 31,
A steady dividend payout is in line with the long-term
strategy of Omega Healthcare to provide attractive risk-adjusted
returns to its stockholders. The new dividend rate results in an
annualized yield of 6.05% based on the closing price of Omega
Healthcare's stock on Oct 15.
With low funds from operations (FFO) payout ratio of 68.6% as
of Jun 30, 2013, Omega Healthcare has adequate room to enhance
its dividend rate going forward. Moreover, as of Jun 30, 2013,
the company had cash and cash equivalents worth $7.0 million, up
from $1.7 million as of Dec 31, 2012.
Solid dividend payouts are arguably the biggest attraction for
real estate investment trust (REIT) investors as the U.S. law
requires these companies to distribute 90% of their annual
taxable income in the form of dividends to shareholders. Notably,
Omega Healthcare has a consistent track record of increasing
shareholders' wealth. Most recently, the company hiked its
dividend by 2.2% to 47 cents in the prior quarter.
Omega Healthcare invests in and offers mortgage financing to
qualified operators of skilled nursing facilities (SNFs), as well
as assisted living facilities (ALFs) and specialty hospitals in
the U.S. As of Jun 30, 2013, the company owned or held mortgages
on 477 assisted living facilities, skilled nursing facilities and
other specialty hospitals, situated across 33 states.
Last month, another REIT -
Host Hotels & Resorts Inc.
) - announced a 9.1% sequential hike in its quarterly cash
dividend. The company will now pay a dividend of 12 cents per
share compared with 11 cents paid in the prior quarter. The
increased dividend was first paid on Oct 15, 2013 to stockholders
of record on Sep 30.
Omega Healthcare currently has a Zacks Rank #3 (Hold). Some
better performing REITs include
LaSalle Hotel Properties
Parkway Properties Inc.
). Both of these carry a Zacks Rank #1 (Strong Buy).
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
HOST HOTEL&RSRT (HST): Free Stock Analysis
LASALLE HTL PRP (LHO): Free Stock Analysis
OMEGA HLTHCARE (OHI): Free Stock Analysis
PARKWAY PPTY (PKY): Free Stock Analysis
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