Thank you for revisiting this company. I've been building a significant position in OHI over the last few months, a little bit with every dip. I'm red, but don't expect it to stay that way, and I'm up for collecting the dividend and the capital appreciation over the next few years. Other financial creators are leaning toward MPW, but I think this has two moats - elder care and rehab/extended care that doesn't require full hospital facilities. The dividend record is long, consistent, and substantial, especially at today's price. Buy on!
I have invested in this REIT for over 10 years. My background has been a working career in storage REITS. These are sharp guys who have managed this company as well as any I have seen in the industry. One thing to add in this excellent recap is the restructuring of the rent structures to help 3 of their management companies out during COVID. There is a recapture of past rents due, as the business recovers. Also, occupancy has begun to recover over the past 6 months. They still have a way to go to get back to where they were preCOVID but it they are on course. I'm sticking with them.
Great video, thank you for sharing... As a fan of REITs in general, I think they produce incredibly strong ROIs, my personal go tos are Realty Income, STAG Industrial and Store Capital, however, I have taken a look too at Omega and it is a solid REIT.. I am doubling down on my current positions before moving on..
Great video indeed, chuck! I've heard of OHI first on this channel! Thank you for that! Can you update us on VICI, STOR, SLG, GOOD, STAG and MPW? You've already covered most of them, but it's been a few weeks and i love REIT's 😉 Cheers from good old germany 👊
good video. I own NHI, clearly undervalued at the moment and market cap is a little bit smaller than Omega. I will check out Omega. The yield looks amazing, valuation decent.
Thank you Chuck for yet another great eye opener stock in OHI for someone who is slowly building a diversified dividend portfolio with growth, value and yield income. Always a treat listening to your analysis and expertise and undervalued stocks. 👍🏼
Another well presented, insightful video. Thanks Chuck 👍 OHI makes up 12% of my SIPP portfolio as I’ve been buying more and more as the share price has been falling.
If population trend is good estimate, why projections for sales growth is only flat? The concerning fact is, though people are retiring, they tend not to choose senior nursing homes. So OHI may not benefit from this seemingly favorable long term trend.
Love your show and I'm subscribed. The high volume of the bell with the "ring the bell" comment hurts the ears. Small price to pay for your great content though!
I believe OHI is already priced in. Relative to the others it would be determined based on the valuation that each traded at as well as their business models. It's not just about interest rates, never is and never was. At least that's my humble opinion.
OHI has two long-term headwinds that are rarely mentioned. First, much of their operators income is paid by Medicare and Medicaid, which get more miserly every year. Second, in an effort to save money, Medicare is increasing reimbursements for skilled part-time in-home care, in an effort to keep people out of nursing homes for as long as possible. My favorite medical REIT is DOC. Their dividend is only about 5%, but their rents are paid by doctors, hospitals, and other health care providers.
Ding, ding, ding, we have a winner. You NAILED it. There is a SECULAR shift away from the high cost structure of SNFs to delivering care in the home. Patients prefer it, and when you eliminate a big chunk of the overhead, it has a far superior cost structure. You are 100% on the money in distinguishing the differing characteristics in the underlying businesses of the tenants of DOC and OHI. It's a shame Chuck didn't address this.
This is a really good point, EXCEPT that very many seniors aren't able to afford to stay in their homes, whether they rent or own. Whether or not most would prefer to stay home may not be accurate. I'd guess that many would prefer to live a more social life in assisted living as opposed to isolation other than a caregiver (who may be a nightmare!) Lots of seniors have no nearby family, transportation becomes an issue. Living in a decent assisted care facility could be a good choice. I think there is room for both models.
In my experience, the cost of in-home skilled nursing (24/7-365) is higher than the cost of staying in a skilled nursing facility. If Medicare reimburses any of the costs of at-home attendants, it’s a well-kept secret. What Medicare will do is deliver meals to your door for a while, whether you want them or not; and make you see a special Dr., who they reimburse, regardless of whether that visit is redundant to the care you are already receiving. It’s easily apparent that these programs represent unnecessary costs, and have been designed so that the patient acts as a catalyst for transferring money from taxpayers to providers.
Sixteen months later (4.17.2023), I wonder if an update on OHI might be useful? Current price is a lower, I've been adding on dips for two years. Also have MPW, which is also very beaten down.
Nice one Chuck. Im also long in OHI and bought alot at this pricerange. Can u maybe take a look at some mortgage reits that look like dividend traps? ORC, IVR and maybe CLM
Matt: a FAST Graphs subscriber can run that calculation in an instant. At 15 times estimated 2021 earnings fair value for the S&P 500 would be approximately 2788. At 18 times earnings the historical normal P/E over the past 20 years the valuation would be approximately 3350. That is a far cry from the 4669 it currently trades at. Regards, Chuck
Appreciate your applied wisdom. Long OHI. Thinking about adding shares after the first of the year as more cash becomes available. 🤔 Also have an equal $ interest in VTR and have been thinking about selling VTR and buying OHI, but I'm not very good as making such decisions.
MPW appears reasonably valued, yields over 5% and has good long-term growth potential. It appears very solid. The biggest negative is it has a below investment grade credit rating of BB+
I think I really like this one, as I like to trade on 1% gains, and being I get a 10% divy. Its like your giving me a head start, now my dream is to win thw hawii ironman at age 55, and I trade like I train, so I will take the 10% and run with it, thanks!!! Find me more please
I'm a new subscriber to fastgraphs too and I'm loving all your videos! Is there a different way to analyze stocks during periods of higher interest rates (ex: the fed could hike rates is all over the news). If so could you explain how to account for this in our stock analysis?
Interest rates Are 1 of many factors that should be considered. However, at the end of the day it always comes down to the fundamental results of the individual business you are analyzing. One reason to invest in companies with good management is so they can navigate difficult times on their shareholders behalf.
Hi Chuck, I'm a new subscriber and just learning how to use the basic tool. I am wondering how to use the Assigned PE vs. the Normal PE when trying to make a decision. They sometimes vary widely. Any insight you can provide would be greatly appreciated. Have followed you for a long time and finally trying to really learn how to use your great tool.
Cathy: welcome to the family. I will be doing tutorial videos where I will cover that very subject.. For now, the orange line represents a discounted cash flow valuation based on widely accepted formulas. In contrast the blue line represents a trimmed average of the value that the market has been assigning. There is often a difference between intrinsic value and market value. Nevertheless, I will be adding further insights in the tutorials. Regards, Chuck
I've been burned by this stock twice in the past. My mother has been in assisted living for 9 years and she says the vacancy rate keeps going up. I'll pass.
Peter: thanks for sharing your view. However, I don't put much faith in stock price volatility. Instead, I trust operating results cash flows especially. If the cash flow stay strong the investment will be fine. Volatility is not risk in my opinion, only how you react to it. Regards, Chuck
When the interest rates get raised this stock will drop like a rock. 10% Dividend wont do much when the stock drops 60-80%. Inflation in the US now by 8% and hitting double digits soon.
When your mom / dad needs skilled nursing, there is little reason to avoid spending their money on it. It’s not like they need to conserve their funds for a ski trip. OHI wins here, as the population grows older.
thanks for the analysis, here is my take. florida has a lot of facilities and there is no vaccine requirement for the health staff,,, so people arnt takin grandma into a facility that is a death sentence. if they would take grandma into an unvaxxed facility then ohi is a steal, 'kill em quick' is the manta of assisted living facilities. secondly - there has been discussion about offering a tax discount (subsidy) for people that take care of their aging parents (a european model where you get a discount for caring for your parent - with many people working from home this pencils out and the memory of people hugging through plastic will be remembered well when you sit down to talk out grandmas last days with the family). third - several of their providers have not paid rent and ohi has cashed out their security deposits (plural). fourth - if they cut their dividend ohi will reprice as if it is bankrupting.
Businesses that dilutes shareholders makes them lose value from their purchasing price why would anyone invest in OMEGA healthcare when the business dilutes them. I could care less if the business is trading below a certain free cash flow there are plenty of other businesses that are undervalued and not diluting their shareholders
REIT'S are a special breed of business. They are required by law to pay out 90% of their taxable income amongst other rules.Here are a couple of reasons why someone might want to invest in Omega healthcare. A one-time $10,000 investment in December 2003 would have generated $82,746 of cumulative dividend income versus the same investment in the S&P generating $4961 of dividend income. Additionally, the $10,000 would have grown to $74,133 versus equal investment in the S&P only growing to $34,591. Remember, REITs invest in real estate in the underlying value of the estate also tends to increase in value and is often not reflected in the market value of the stock.regards, Chuck
I think the mistake you are making is that you are looking at the payout ratio of earnings. REITs are required by law to pay out 90% other taxable income. The proper metrics to look at with REITs are FFO and AFFO. Omega's payout ratios are fine when viewed properly.
The understanding in my extensive research of reits is they domt have to payout 90% or more. But in order for tax saving purposes and other factors it makes it easier on the companies to do so. Cause there are plenty of reits that dont pay 90% or above.
You said at the beginning of the video that some of OHI's tenants aren't making their lease payments. These lost payments are probably listed on the balance sheet as deferrals (a receivable), which means their default isn't registered. If OHI winds up eating these payments, how big a hit would they take? Would they have any earnings at-all?
The payout ratio is 141%, they pay more in dividenda than they make earnings, that's horrible and means they gotta take out debt just to pay the dividend let alone run the rest of the company
Dylan: you are looking at the payout ratio of earnings. In the video I cover why earnings are not the proper metric for REITs. Also, REITs are required by law to pay out 90% of their distributable income. If you look at the video based on FFO and AFFO the payout ratios are in alignment with industry norms and REIT requirements. Also, REITs are more likely to issue shares and take on debt. I also cover that in the video. Regards, Chuck
![Blox Fruits Dragon Rework Update [Full Stream]](http://i.ytimg.com/vi/EqDAp8udhm0/mqdefault.jpg)
Thank you for revisiting this company. I've been building a significant position in OHI over the last few months, a little bit with every dip. I'm red, but don't expect it to stay that way, and I'm up for collecting the dividend and the capital appreciation over the next few years. Other financial creators are leaning toward MPW, but I think this has two moats - elder care and rehab/extended care that doesn't require full hospital facilities. The dividend record is long, consistent, and substantial, especially at today's price. Buy on!
I have invested in this REIT for over 10 years. My background has been a working career in storage REITS. These are sharp guys who have managed this company as well as any I have seen in the industry. One thing to add in this excellent recap is the restructuring of the rent structures to help 3 of their management companies out during COVID. There is a recapture of past rents due, as the business recovers. Also, occupancy has begun to recover over the past 6 months. They still have a way to go to get back to where they were preCOVID but it they are on course. I'm sticking with them.
Steve: thanks for the professional insight.
Excellent video - appreciate the explanations of the metrics AFFO and FFO - and REIT's in general !
Great video, thank you for sharing... As a fan of REITs in general, I think they produce incredibly strong ROIs, my personal go tos are Realty Income, STAG Industrial and Store Capital, however, I have taken a look too at Omega and it is a solid REIT.. I am doubling down on my current positions before moving on..
Long OHI and O among others.
Great video indeed, chuck! I've heard of OHI first on this channel! Thank you for that! Can you update us on VICI, STOR, SLG, GOOD, STAG and MPW? You've already covered most of them, but it's been a few weeks and i love REIT's 😉
Cheers from good old germany 👊
good video. I own NHI, clearly undervalued at the moment and market cap is a little bit smaller than Omega. I will check out Omega. The yield looks amazing, valuation decent.
Thank you Chuck for yet another great eye opener stock in OHI for someone who is slowly building a diversified dividend portfolio with growth, value and yield income. Always a treat listening to your analysis and expertise and undervalued stocks. 👍🏼
Thanks Mr Valuation I am down by 15% on this but now emboldened by this video. I will hold and reinvest dividends
I like that you went into more than the numbers in this one.
Thank you chuck, agree with you! The risk / reward on this one is very attractive 👍
Thank you chuck, I've been loading up on OHI. This was perfect timing. Appreciate you!
Looking at the graphic at 11:07 does anyone know what REID #1 is for Outstanding Financial Performance among all REITs? Thank you
Another well presented, insightful video. Thanks Chuck 👍
OHI makes up 12% of my SIPP portfolio as I’ve been buying more and more as the share price has been falling.
I'll admit I was skeptical when I saw a boomer and heard a REIT discussion. However, well done on the analysis. I look forward to future videos.
I really like CareTrust REIT for dividend growth and capital growth
I’m planning to add omega to my portfolio this month. Now I know for sure
My largest holding is ohi. I'm loving the sale and think they will recover nicely eventually. Long hold
When chuck has suggestions i shut up and take a hint thanks for all you free suggestions
Thanks for the update on this company! I have a couple hundred shares and may add more.
Own OHI, but MPW is my favourite in the Healthcate REIT sector!
Down big now huh?
you bring a lot of value !!! thank you
Thanks for the video Chuck, greetings from Hungary.
Another great video. Really useful to see the thought process and modes of evaluation.
I've been adding to this REIT
Tks for the video. How do you see OHI and MPW today?
Thanks for this information! New to investing, I will definitely look at this one
I've been waiting for this. Yeah, it looks like a good value compared to the overvalued S&P.
If population trend is good estimate, why projections for sales growth is only flat? The concerning fact is, though people are retiring, they tend not to choose senior nursing homes. So OHI may not benefit from this seemingly favorable long term trend.
Thank you !! I have in my portfolio and I will add more and I have new money 😅
Do you know the tax treatment of the dividend, what portion is “Qualified dividend” ?
Opened postion on this one. Love the yeild.
Love your show and I'm subscribed. The high volume of the bell with the "ring the bell" comment hurts the ears. Small price to pay for your great content though!
Been here! Happy!
Thank you for the video. I'm long in OHI. Can you do a video on SBRA and CTRE?
In case FED will raise interest, how it will affect Reits in general and OHI particularly? should we expect the same for O MPW VICI IRM MAIN WPC SPG?
I believe OHI is already priced in. Relative to the others it would be determined based on the valuation that each traded at as well as their business models. It's not just about interest rates, never is and never was. At least that's my humble opinion.
Thank you very much for the great information!!!
Thanks for another great video. It would be great to have a follow up video on UNUM as well. It seems that they are in a "similar situation" of OHI.
Might add VTRS for good masure. It got hit by tax loss selling too.
OHI has two long-term headwinds that are rarely mentioned. First, much of their operators income is paid by Medicare and Medicaid, which get more miserly every year. Second, in an effort to save money, Medicare is increasing reimbursements for skilled part-time in-home care, in an effort to keep people out of nursing homes for as long as possible. My favorite medical REIT is DOC. Their dividend is only about 5%, but their rents are paid by doctors, hospitals, and other health care providers.
Ding, ding, ding, we have a winner. You NAILED it. There is a SECULAR shift away from the high cost structure of SNFs to delivering care in the home. Patients prefer it, and when you eliminate a big chunk of the overhead, it has a far superior cost structure. You are 100% on the money in distinguishing the differing characteristics in the underlying businesses of the tenants of DOC and OHI. It's a shame Chuck didn't address this.
This is a really good point, EXCEPT that very many seniors aren't able to afford to stay in their homes, whether they rent or own. Whether or not most would prefer to stay home may not be accurate. I'd guess that many would prefer to live a more social life in assisted living as opposed to isolation other than a caregiver (who may be a nightmare!) Lots of seniors have no nearby family, transportation becomes an issue. Living in a decent assisted care facility could be a good choice. I think there is room for both models.
In my experience, the cost of in-home skilled nursing (24/7-365) is higher than the cost of staying in a skilled nursing facility. If Medicare reimburses any of the costs of at-home attendants, it’s a well-kept secret. What Medicare will do is deliver meals to your door for a while, whether you want them or not; and make you see a special Dr., who they reimburse, regardless of whether that visit is redundant to the care you are already receiving. It’s easily apparent that these programs represent unnecessary costs, and have been designed so that the patient acts as a catalyst for transferring money from taxpayers to providers.
Medicaid might pay for in-home care, but I don’t believe that Medicare offers it.
hey Chuck. Did anything change in u opinion after q4?
Sixteen months later (4.17.2023), I wonder if an update on OHI might be useful? Current price is a lower, I've been adding on dips for two years. Also have MPW, which is also very beaten down.
Finally a high yeild stock with quarterly divs that I can set up on DRIP
I've been adding CCI as well.
Long CCI.
I have been adding this stock, thank for the analysis!
Well put/ Keeping this on my radar.
Thank you Sir.
Thanks for content chuck
Nice one Chuck. Im also long in OHI and bought alot at this pricerange. Can u maybe take a look at some mortgage reits that look like dividend traps? ORC, IVR and maybe CLM
Funny, I was looking at this equity today. Seeking non-ordinary income distributions to keep the tax bill low. I also hold LTC.
Chuck what should the S&P be valued at today? You stated it is dangerously overvalued, can you explain?
Matt: a FAST Graphs subscriber can run that calculation in an instant. At 15 times estimated 2021 earnings fair value for the S&P 500 would be approximately 2788. At 18 times earnings the historical normal P/E over the past 20 years the valuation would be approximately 3350. That is a far cry from the 4669 it currently trades at. Regards, Chuck
Appreciate your applied wisdom. Long OHI. Thinking about adding shares after the first of the year as more cash becomes available. 🤔
Also have an equal $ interest in VTR and have been thinking about selling VTR and buying OHI, but I'm not very good as making such decisions.
Thoughts on MPW?
MPW appears reasonably valued, yields over 5% and has good long-term growth potential. It appears very solid. The biggest negative is it has a below investment grade credit rating of BB+
Update to OHI pleased!
Thank you nice one
Mr Carnevale please analyze MFA. Thanks
What are your thoughts on this company when interest rates go up…being a reit ?
I would like to know this too
I think I really like this one, as I like to trade on 1% gains, and being I get a 10% divy. Its like your giving me a head start, now my dream is to win thw hawii ironman at age 55, and I trade like I train, so I will take the 10% and run with it, thanks!!! Find me more please
Hi Chuck, could you please review knop... ;)
Excellent video and fantastic dividend paying stock. Why has the price dropped so much in your opinion? Are they having trouble collecting rents?
yes
They all have problems collecting rents in tourism it’s way worse building owners are suffering
Great video ser. Just subed.
Ok, I bought some :-)
I'm a new subscriber to fastgraphs too and I'm loving all your videos! Is there a different way to analyze stocks during periods of higher interest rates (ex: the fed could hike rates is all over the news). If so could you explain how to account for this in our stock analysis?
Interest rates Are 1 of many factors that should be considered. However, at the end of the day it always comes down to the fundamental results of the individual business you are analyzing. One reason to invest in companies with good management is so they can navigate difficult times on their shareholders behalf.
Hi Chuck, I'm a new subscriber and just learning how to use the basic tool. I am wondering how to use the Assigned PE vs. the Normal PE when trying to make a decision. They sometimes vary widely. Any insight you can provide would be greatly appreciated. Have followed you for a long time and finally trying to really learn how to use your great tool.
Cathy: welcome to the family. I will be doing tutorial videos where I will cover that very subject.. For now, the orange line represents a discounted cash flow valuation based on widely accepted formulas. In contrast the blue line represents a trimmed average of the value that the market has been assigning. There is often a difference between intrinsic value and market value. Nevertheless, I will be adding further insights in the tutorials. Regards, Chuck
Thank you Chuck!!
Thx!
I wonder if OHI is thinking about an acquisition. That could explain the mixed shelf offering.
Maybe just acquiring additional properties. Long OHI.
OHI has a history of acquisitions so you could be right as well as Cliff below may also be correct. We will soon see.
Why has it fallen? That is the question or is the market assuming interest rate hikes, which has decimated highly indebted REITS?
Amazing how many people here have failed to ask this question. I have 3 comments above with some of the answers.
Nice review.
Like your videos
I've been burned by this stock twice in the past. My mother has been in assisted living for 9 years and she says the vacancy rate keeps going up. I'll pass.
As long term charts often don't lie. If price goes below $25 support it will be really bloody for a many years.
Peter: thanks for sharing your view. However, I don't put much faith in stock price volatility. Instead, I trust operating results cash flows especially. If the cash flow stay strong the investment will be fine. Volatility is not risk in my opinion, only how you react to it. Regards, Chuck
When the interest rates get raised this stock will drop like a rock. 10% Dividend wont do much when the stock drops 60-80%. Inflation in the US now by 8% and hitting double digits soon.
When your mom / dad needs skilled nursing, there is little reason to avoid spending their money on it. It’s not like they need to conserve their funds for a ski trip. OHI wins here, as the population grows older.
thanks for the analysis, here is my take. florida has a lot of facilities and there is no vaccine requirement for the health staff,,, so people arnt takin grandma into a facility that is a death sentence. if they would take grandma into an unvaxxed facility then ohi is a steal, 'kill em quick' is the manta of assisted living facilities. secondly - there has been discussion about offering a tax discount (subsidy) for people that take care of their aging parents (a european model where you get a discount for caring for your parent - with many people working from home this pencils out and the memory of people hugging through plastic will be remembered well when you sit down to talk out grandmas last days with the family). third - several of their providers have not paid rent and ohi has cashed out their security deposits (plural). fourth - if they cut their dividend ohi will reprice as if it is bankrupting.
Businesses that dilutes shareholders makes them lose value from their purchasing price why would anyone invest in OMEGA healthcare when the business dilutes them. I could care less if the business is trading below a certain free cash flow there are plenty of other businesses that are undervalued and not diluting their shareholders
REIT'S are a special breed of business. They are required by law to pay out 90% of their taxable income amongst other rules.Here are a couple of reasons why someone might want to invest in Omega healthcare. A one-time $10,000 investment in December 2003 would have generated $82,746 of cumulative dividend income versus the same investment in the S&P generating $4961 of dividend income. Additionally, the $10,000 would have grown to $74,133 versus equal investment in the S&P only growing to $34,591. Remember, REITs invest in real estate in the underlying value of the estate also tends to increase in value and is often not reflected in the market value of the stock.regards, Chuck
The dividend is unsustainable at this payout ratio.
I think the mistake you are making is that you are looking at the payout ratio of earnings. REITs are required by law to pay out 90% other taxable income. The proper metrics to look at with REITs are FFO and AFFO. Omega's payout ratios are fine when viewed properly.
@@FASTgraphs thank you
The understanding in my extensive research of reits is they domt have to payout 90% or more. But in order for tax saving purposes and other factors it makes it easier on the companies to do so. Cause there are plenty of reits that dont pay 90% or above.
Too risky for me. This one I do not like.
The Senior space has destroyed so-much-wealth, your charts are a false flag. I would recommend a solid Avoid on OHI.
Are you saying FACTS are irrelevant? If you are, I respectfully disagree.
You said at the beginning of the video that some of OHI's tenants aren't making their lease payments. These lost payments are probably listed on the balance sheet as deferrals (a receivable), which means their default isn't registered. If OHI winds up eating these payments, how big a hit would they take? Would they have any earnings at-all?
The payout ratio is 141%, they pay more in dividenda than they make earnings, that's horrible and means they gotta take out debt just to pay the dividend let alone run the rest of the company
Dylan: you are looking at the payout ratio of earnings. In the video I cover why earnings are not the proper metric for REITs. Also, REITs are required by law to pay out 90% of their distributable income. If you look at the video based on FFO and AFFO the payout ratios are in alignment with industry norms and REIT requirements. Also, REITs are more likely to issue shares and take on debt. I also cover that in the video. Regards, Chuck