Daily Stock Pick: Omega Healthcare

A portfolio of stocks I've been building since September 3 is named Volio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the third of five healthcare sector stocks striving to join my Volio folio. This could be the twenty-second pick for Volio!

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

My subject today is a mid-cap healthcare facility real estate investment trust named, Omega Healthcare Investors Inc. Their trading ticker symbol is OHI.  This is my first report for Omega Healthcare Investors Inc.

Omega Healthcare Investors Inc is a healthcare facility real estate investment trust that invests in the United States real estate markets. Omega's portfolio focuses on long-term healthcare facilities. The company maintains dual goals of increasing its returns to investors while also maintaining a high level of care for residents. Omega works to obtain contractual rent escalations under long-term leases, along with fixed-rate mortgage loans. The company considers merger and acquisition investment as a component of its operational growth strategy.

The assets span all regions within the US, as well as in the UK, and the company is headquartered in Hunt Valley, MD.

I use three key data points to gauge dividend-paying equities or funds like Omega Healthcare Investors Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

OHI Price

Omega's price per share closed at $43.41 yesterday. A year ago its price was $39.82. So, in the past nearly a year its market price grew by $3.59, or just over 9%.

Assuming Omega's stock trades in the range of $36 to $48 this next year, its recent $43.41 price could rise by $2.59 to reach $46.00 by January 29, 2021, assuming upward price momentum continues.

OHI Dividends

Omega's latest declared quarterly dividend was $0.67, payable February 14. That $0.67 Q dividend generates and annual payout of $2.68 yielding 6.17% at yesterday's $43.41 share price.

OHI Gains?

Adding the $2.68 annual estimated dividend to my $2.59 estimate of Omega Healthcare Investors Inc price upside shows a $5.27 potential gross gain, per share, which will be reduced by any costs to trade those shares.

As for costs, if we put a little under $1,000.00 today in Omega Healthcare Investors Inc at its recent $43.41 price, would buy 23 shares of OHI.

A $10 broker fee paid half at purchase and half at sale could cost us about $0.43 per share.

Subtract that $0.43 brokerage cost from the estimated $5.27 gross estimated gain per share leaves a net gain of $4.84 X 23 shares = $111.32 or an 11.15% net gain on a $998.43 investment.

Therefore, Omega Healthcare Investors Inc, whose trading ticker symbol is OHI shows a possible 11.15% net gain including a 6.17% dividend yield. It could be more, it could be less.   

The above speculation is based on past year performance. The actual results remain to be seen to learn if Omega Healthcare Investors Inc, is worth your time and money.

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