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Omega: A Cash Machine in Nursing Homes

07/30/2019 5:00 am EST

Focus: REITS

Bryan Perry

Editor, Cash Machine, Premium Income, Quick Income Trader, Instant Income Trader

Since interest rates are heading lower in the United States, the dollar remains king among all global currencies, asserts Bryan Perry, industry-leading dividend expert and editor of Cash Machine.

Plus, the demographics of the U.S. population show an expanding retirement population that is living longer, so I thought this month’s pick in a high-yield, highly defensive domestic asset would be fitting.

Good health care is undeniably at the top of the list for every retired and elderly citizen and thus offers some excellent investment propositions in the right sub-sectors. One of those sub-sectors I find attractive against the current market landscape is the health care facilities space.

The largest skilled nursing facility (SNF) and assisted living facilities operator in the industry is Omega Healthcare Investors (OHI) — a REIT that spans 41 states in the United States, as well as the United Kingdom. The company’s portfolio consists of 891 operating facilities.

Gross real estate investments are approximately $9.0 billion. Omega operates triple-net-lease properties, which means it isn’t liable for the three big add-ons that can put a strain other REITs — taxes, maintenance and insurance. Omega just collects the rent from the health care companies that lease from it, eliminating a lot of unknown risks.

The dividend yield is right at 7.0% with the next ex-dividend date set for around Aug. 15. Shares of OHI have been trading in a tight range for the past four months and should push higher in a market where bond yields are in steady decline. Let’s add this market leading health care REIT to our Safe Haven Portfolio.

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