OHI
Omega Healthcare Investors, Inc.
$50.05
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 18.6% below fair value
You pay
$50.05
Bear
$48.86
Fair
$61.50
Bull
$74.15
Bear
$48.86
-2.4%
$3.07 FFO × 18x
Fair
$61.50
+22.9%
$3.07 FFO × 23x
Bull
$74.15
+48.1%
$3.07 FFO × 29x
Key Value Driver
FFO/share ($3.07) × healthcare P/FFO multiple
Implied Market Multiple
16.3x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $50.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $61.50 per share.
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 5.4% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $50.00 (from 28 analysts). Our estimate is 31% above the consensus -- consider that gap carefully.
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