OHI
Omega Healthcare Investors, Inc.
$44.41
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 28.1% below fair value
You pay
$44.41
Bear
$48.89
Fair
$61.77
Bull
$74.66
Bear
$48.89
+10.1%
$3.06 FFO × 18x
Fair
$61.77
+39.1%
$3.06 FFO × 23x
Bull
$74.66
+68.1%
$3.06 FFO × 29x
Adjust Assumptions
23.4x
$
Key Value Driver
FFO/share ($3.06) × healthcare P/FFO multiple
Implied Market Multiple
14.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$50.25
Divergence from AlphaVal
23%
Summary
At $3.06 FFO/share with a 23x healthcare REIT multiple, the base-case value is $61.77 per share. Dividend yield: 6.1%. DDM cross-check: $38.81.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 6.1% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $38.81 (37% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify