Omega Healthcare's Q3 earnings estimated to benefit stock, dividends

[Usual day in crowded nursing home]
miodrag ignjatovic/E+ via Getty Images

Omega Healthcare Investors (OHI [https://seekingalpha.com/symbol/OHI]) is scheduled to announce Q3 earnings results on Thursday, October 30th, after market close, and solid fundamentals are expected to benefit the stock and dividends.

The consensus FFO estimate [https://seekingalpha.com/symbol/OHI/earnings/estimates?period=quarterly] is $0.76 (+2.20% Y/Y) and the consensus revenue estimate is $261.59M (+14.85% Y/Y).

Last quarter, the healthcare REIT boosted [https://seekingalpha.com/news/4475916-omega-healthcare-raised-2025-guidance-after-strong-q2-performance] its 2025 guidance for adjusted FFO after Q2 earnings and revenue topped the average analyst estimates.

"Overall, the backdrop is highly favorable. Operating metrics continue to improve, the pipeline is very active, and we have a strong balance sheet and a cost of capital that should allow us to continue to accretively invest," CEO Taylor Pickett had said.

Tenant Genesis filed for Chapter 11 but Omega expects to receive full monthly rent during the process. "Upon its emergence from this restructuring, we believe Genesis will be a financially stronger company with an enhanced credit," Pickett had then said.

"The latest quarter has been very solid in many regards, with the AFFO reaching $232.2M and $453.6M in H1," said [https://seekingalpha.com/article/4826572-omega-healthcare-resilient-and-expanding-healthcare-reit-hitting-new-highs-still-worth-buying] Seeking Alpha author IWA Research [https://seekingalpha.com/author/iwa-research]. "They've also been signaling a very robust acquisition pipeline with low leverage liquidity available, highlighting how their senior housing portfolio continued to grow to about 38% of their portfolio mix."

"Combined, this growth and their solid AFFO can result even in a dividend increase in the near future, which the company's CEO even mentioned as something the board has recently talked about," added the author with a Buy rating.

Notably, the stock has retreated ~5% in the last one month, and is trading ~1.3% below its previous close ahead of OHI's Q3 earnings release.

"While I am still bullish on OHI, there are several risks to consider," noted [https://seekingalpha.com/article/4827577-omega-healthcare-the-recent-retracement-is-an-opportunity] SA analyst Steven Fiorillo [https://seekingalpha.com/author/steven-fiorillo].

"If the underlying operators fail to maximize their revenue or have operational hardships, then there could be issues collecting rent in the future," said Fiorillo. "OHI’s revenue depends on stability from Medicare and Medicaid reimbursements, as their operators could be negatively impacted by regulatory changes, which could potentially lower reimbursement rates."

"In Q2, OHI started looking at new lease structures that would open them up to additional deals, but it would strip away some protections that the triple net structure provides them, which could negatively impact them in the future if they are forced to allocate additional capital toward their properties that they wouldn’t have had to do under the triple net structure. This could create a situation where margins contract," added Fiorillo.

Still, the author grades the stock as Buy.

Seeking Alpha's Quant Rating [https://seekingalpha.com/symbol/OHI/ratings/quant-ratings] system, contributors [https://seekingalpha.com/symbol/OHI/ratings/author-ratings], and the sell-side analysts [https://seekingalpha.com/symbol/OHI/ratings/sell-side-ratings] give the stock a Buy rating.

Insiders are net sellers, with the company seeing 3 sell transactions in the last three months against 1 open market buy.

MORE ON OMEGA HEALTHCARE INVESTORS

* Omega Healthcare: The Recent Retracement Is An Opportunity [https://seekingalpha.com/article/4827577-omega-healthcare-the-recent-retracement-is-an-opportunity]
* Omega Healthcare: Resilient And Expanding Healthcare REIT Hitting New Highs, Still Worth Buying [https://seekingalpha.com/article/4826572-omega-healthcare-resilient-and-expanding-healthcare-reit-hitting-new-highs-still-worth-buying]
* Omega Healthcare Investors: A Solid REIT With A Hefty Yield [https://seekingalpha.com/article/4818528-omega-healthcare-investors-a-solid-reit-with-a-hefty-yield]
* Omega Healthcare Investors announces closing of new $2.30B senior unsecured credit facility [https://seekingalpha.com/news/4500348-omega-healthcare-investors-announces-closing-of-new-230b-senior-unsecured-credit-facility]
* Omega Healthcare raises 2025 AFFO guidance to $3.04–$3.07 per share while signaling robust acquisition pipeline [https://seekingalpha.com/news/4476845-omega-healthcare-raises-2025-affo-guidance-to-3_04-3_07-per-share-while-signaling-robust]