Omega Healthcare Investors, Inc.

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Omega Healthcare Investors, Inc. (NYSE: OHI) is a real estate investment trust (REIT). The Company operates through a single segment, which invests in healthcare-related real estate properties located in the United States and the United Kingdom. Its core business is to provide financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities (SNFs), assisted living facilities (ALFs), and to a lesser extent, independent living facilities (ILFs), rehabilitation and acute care facilities (specialty facilities) and medical office buildings (MOBs).

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• OHI's share price has dropped by 1.23% in the past three months. Similarly, in the long term, the stock has corrected by 8.17% over the past six months.

• The stock is leaning near the middle band of its 52-week range of USD 44.41 and 52-week low price of USD 29.66, with the current price near an important support zone of USD35.00-USD 36.00, therefore expectations of upward movement in case these levels hold.
• The price is currently between its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 53.09, upward trending, with expectations of upward movement.

1.2 The Key Positives, Negatives, and Investment summary   

1.3 Top 10 shareholders:

The top 10 shareholders together form ~47.36% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc. and BlackRock Institutional Trust Company, N.A., are the biggest shareholders, holding the maximum stake in the company at ~13.42% and ~10.19%, respectively.

1.4 Dividend payments with impressive dividend yield:

Omega Healthcare Investors, Inc. (OHI) has a consistent history of paying quarterly dividends, with its most recent declaration on January 29, 2025, setting a cash dividend of USD0.67 per share, payable on February 18, 2025, to shareholders of record by February 10, 2025, reflecting its commitment to delivering stable returns to investors. The stock chart indicates a trade price of USD37.50 as of March 25, 2025, which, with an annual dividend of USD2.68 (USD0.67 quarterly), implies a current dividend yield of approximately 7.15%, a competitive figure for a REIT. OHI’s ability to maintain this yield is supported by its strong Funds Available for Distribution (FAD), which grew to USD202 million, or USD0.70 per share, in Q4 2024, alongside a reduced dividend payout ratio in 2024, as noted by CEO Taylor Pickett. However, the chart also shows periods of volatility, such as the sharp decline around 2020, highlighting potential risks to dividend stability from market or sector-specific challenges, though OHI’s recent deleveraging and operational improvements bolster its capacity to sustain dividends

1.5 Key Metrics

Omega Healthcare Investors, Inc. (OHI) demonstrated significant financial improvement in FY24, with its EBITDA and operating margins both rising to 62.74% from 51.48% in FY23, reflecting enhanced operational efficiency, while net margin increased to 39.74% from 26.20%, driven by a USD169 million rise in net income to USD417.8 million. Return on average common equity improved to 10.02% from 6.74%, return on average total assets grew to 4.39% from 2.69%, and return on invested capital rose to 6.76% from 5.27%, indicating better capital utilization and profitability. However, the gross profit margin slightly declined to 98.62% from 98.42%, and the income tax rate edged up to 2.58% from 2.45%, suggesting minor pressures on profitability. Overall, OHI’s FY24 performance underscores its ability to grow earnings and improve returns, supported by strategic investments and deleveraging, though slight margin pressures warrant monitoring.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY24:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• OHI's share price has dropped by 1.23% in the past three months. Similarly, in the long term, the stock has corrected by 8.17% over the past six months.

• The stock is leaning near the middle band of its 52-week range of USD 44.41 and 52-week low price of USD 29.66, with the current price near an important support zone of USD35.00-USD 36.00, therefore expectations of upward movement in case these levels hold.
• The price is currently between its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 53.09, upward trending, with expectations of upward movement.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 26, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.