Atlanta, Georgia- Omega Healthcare Investors Inc., a skilled nursing REIT based in the United States, successfully covered its dividend with adjusted funds from operations in the first quarter. The company showed improvement in its margin of safety compared to the previous quarter, even with an overall pay-out ratio of 97% suggesting a narrow margin of safety.

Following a positive performance in adjusted funds from operations during 1Q24, the real estate investment trust is likely to continue paying dividends of $0.67 per share per quarter. In the same quarter, Omega Healthcare Investors executed $75 million in new investments and divested underperforming assets, maintaining an affordable stock price based on AFFO with a moderate risk/reward relationship.

Recent developments have led to an optimistic outlook for investors as Omega Healthcare Investors revealed its 2024 adjusted funds from operations guidance, marking the first time in three years that a stable projection was offered. The company’s growing AFFO and strategic asset divestments position it as a compelling passive income investment.

Specializing in senior-focused healthcare real estate, Omega Healthcare Investors allocated a significant portion of its investments to skilled nursing and senior housing segments. As of 1Q24, skilled nursing and transitional care facilities represented 71% of its investments, while senior housing accounted for the remaining 29%, totaling real estate assets worth $9.9 billion.

Despite facing challenges with operators’ financial difficulties stemming from the pandemic, Omega Healthcare Investors is actively transitioning properties to more stable operators while expanding its asset base. In the first quarter of 2024, the company invested $75 million to enhance its portfolio, including $13.3 million in new properties.

The improvement in adjusted funds from operations, reaching $176.1 million in 1Q24, reflected a 10% year-over-year growth primarily driven by fewer impairments related to real estate transactions. Furthermore, the dividend support witnessed an increase, with a pay-out ratio of 98% compared to the previous quarter, showcasing a positive trend for investors. Omega Healthcare Investors anticipates earning $2.70 – $2.80 per share in adjusted funds from operations in 2024, maintaining a stable AFFO multiple.