Omega Healthcare Investors Inc (NYSE: OHI)

Sector: Real Estate Industry: REIT - Healthcare Facilities CIK: 0000888491
Market Cap 9.79 Bn
P/B 2.57
P/E 37.42
P/S 11.00
ROIC (Qtr) 7.30
Div Yield % 6.91
Rev 1y % (Qtr) 14.28
Total Debt (Qtr) 4.26 Bn
Debt/Equity (Qtr) 0.82
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About

Omega Healthcare Investors, Inc., often recognized by its stock symbol OHI, operates in the healthcare industry, specifically focusing on real estate properties related to healthcare. The company's operations span across the United States and the United Kingdom, investing in a diverse range of healthcare facilities. Omega Healthcare Investors' primary business activities revolve around providing financing and capital to the long-term healthcare industry. The company's portfolio includes a variety of property types, such as skilled nursing facilities...

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Investment thesis

Bull case

  • Operating cash flow of 878.55M provides exceptional 45.56x coverage of minority interest expenses 19.28M, showing strong core operations.
  • Operating cash flow of 878.55M provides strong 19.88x coverage of stock compensation 44.19M, indicating sustainable incentive practices.
  • Strong operating cash flow of 878.55M provides 8.44x coverage of SG&A expenses 104.14M, showing efficient operational cost management.
  • Operating cash flow of 878.55M provides strong 2.50x coverage of operating expenses 352.08M, showing operational efficiency.
  • Strong free cash flow of 363.84M provides 3.49x coverage of SG&A expenses 104.14M, indicating efficient cost management.

Bear case

  • Operating cash flow of 878.55M barely covers its investment activities of (539.79M), with a coverage ratio of -1.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 878.55M provides thin coverage of dividend payments of (780.39M) with a -1.13 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 54.56M provide limited coverage of acquisition spending of (109.17M), which is -0.50x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 819.97M show weak coverage of depreciation charges of 325.25M, with a 2.52 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 363.84M represents just -0.62x of debt issuance (585.05M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Counterparty Name Breakdown of Revenue (2021)

Counterparty Name Breakdown of Revenue (2021)

Peer comparison

Companies in the REIT - Healthcare Facilities
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WELL Welltower Inc. 143.17 Bn 152.82 13.21 21.38 Bn
2 VTR Ventas, Inc. 38.32 Bn 152.44 6.57 13.22 Bn
3 OHI Omega Healthcare Investors Inc 9.79 Bn 37.42 11.00 4.26 Bn
4 DOC Healthpeak Properties, Inc. 9.29 Bn 18.52 5.20 10.14 Bn
5 CTRE CareTrust REIT, Inc. 8.40 Bn 26.19 17.62 0.89 Bn
6 AHR American Healthcare REIT, Inc. 6.95 Bn -212.00 3.23 1.70 Bn
7 HR Healthcare Realty Trust Inc 6.42 Bn -26.10 5.44 4.15 Bn
8 NHI National Health Investors Inc 2.58 Bn 24.34 21.93 1.11 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.41 1.24
EV to Cash from Ops. EV/CFO 25.89 24.29
EV to Debt EV to Debt 3.33 3.18
EV to EBIT EV/EBIT 30.39 14.77
EV to EBITDA EV/EBITDA 19.25 19.20
EV to Free Cash Flow [EV/FCF] EV/FCF 35.53 1.78
EV to Market Cap EV to Market Cap 1.45 1.96
EV to Revenue EV/Rev 15.92 11.43
Price to Book Value [P/B] P/B 2.57 2.64
Price to Earnings [P/E] P/E 37.42 29.39
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.76 -1.90
Dividend Payout Ratio % Div Payout % (Qtr) 136.70 299.46
Dividend per Basic Share Div per Share (Qtr) 2.68 1.85
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 217.71 49.00
Interest Coverage Int. cover (Qtr) 3.81 2.08
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -22.46 -326.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -90.06 31.24
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 12.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 28.56 35.66
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.38 12.40
EBIT Growth (1y) % EBIT 1y % (Qtr) 28.34 25.81
EBT Growth (1y) % EBT 1y % (Qtr) 45.00 71.96
EPS Growth (1y) % EPS 1y % (Qtr) 24.84 29.36
FCF Growth (1y) % FCF 1y % (Qtr) 10.55 -181.35
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 13.39 13.29
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.17
Cash Payout Ratio Cash Payout (Qtr) 0.56 0.07
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.82 4.36
Interest Cover Ratio Int Coverage (Qtr) 3.81 2.08
Times Interest Earned Times Interest Earned (Qtr) 3.81 2.08
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 96.20 55.93
EBIT Margin % EBIT Margin % (Qtr) 68.90 28.99
EBT Margin % EBT Margin % (Qtr) 50.83 13.55
Gross Margin % Gross Margin % (Qtr) 98.80 71.26
Net Profit Margin % Net Margin % (Qtr) 49.60 13.18