Zacks_Analysts' Blog : Omega Bumps Dividend a Penny - Analyst Blog

Omega Healthcare Investors Inc. (OHI) a real estate investment trust recently announced its decision to hike its quarterly dividend by a penny to 38 cents. The increased dividend will be paid on May 16, 2011 to shareholders of record on April 29, 2011. The dividend yield is 6.36% as of April 15, 2011.

In October 2010, Omega Healthcare increased its quarterly dividend from 36 cents per share to 37 cents per share which was paid on January 31 2011.

Net cash flow from financing activities was $242.0 million for the fiscal year December 31, 2010. Cash and cash equivalents stood at $6.9 million at the end of December 31, 2010, an increase of $4.8 million from the previous year. With signs of recovery in the economy, dividend increases have now become common among companies sitting on surplus cash. These strategies enhance shareholders’ return.

For the fourth quarter 2010, Omega Healthcare reported adjusted funds from operations (FFO) of $45.1 million, or $0.46 per share, compared to $30.8 million or $0.36 in the prior year period. Funds from operations, a widely used metric, is obtained after adding depreciation and amortization and other non-cash expenses to net income and is considered a key measure of a real estate investment trust’s performance.

For fiscal year 2010, Omega Healthcare reported FFO of $156.1 million, or $1.66 per share, compared to $122.7 million, or $1.47 per share in the prior year period.The company expects its guidance to be in the range of $1.80 - $1.86 per share for fiscal year 2011.

Omega Healthcare is a real estate investment trust that invests in healthcare facilities in the United States. It provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs), as well as assisted living facilities (ALFs), independent living facilities (ILFs), and rehabilitation and acute care facilities.

Omega Healthcare currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, HCP Inc. (HCP) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.