![]() ![]() For those that didn't have the joy of studying for the CFA for years, it's worth remembering that Nareit FFO excludes gains on properties sold.ĪFFO doesn't have a strict definition like FFO does, but it generally results in a lower figure because it deducts the day-to-day operating costs of the portfolio. Meaningful asset dispositions don't happen every year, but when they do, it's a nice boost to total cash flow. 2019's gains on assets sold bested 2020's by $36.6 million. 2020's 10-K also shows gains, but they were more modest. Referencing the most recent annual report 10-K filing, management notes that $142.5 million in net gains were generated from the sale of 48 facilities. For a concrete example, Q4 2021 realized a $161.6 million gain on assets sold. Omega's portfolio doesn't just sit there - it's actively managed and that's an important lever for determining if the company's value and cash flow increases or decreases over time.Īfter tediously following property acquisition, development, and disposition prices, our conclusion is it has been accretive. That's against a market capitalization of just under $7 billion. Omega, for example, acquired $595 million in properties, spent $319 million acquiring properties, and dedicated $164 million to capital renovation and construction spending in reporting year 2021 alone. ![]() It's easy to overlook the nuts and bolts of how REITs function. So, let's take a broader look at 2020 versus 2021. Based on this careful analysis of key metrics involving income and cash flow, nothing here rings any alarm bells. ![]() We'll go into more detail on the balance sheet later, but there weren't any material changes throughout the period. AFFO per share in 2021 compared to 2020 was up slightly from $3.23 to $3.31, for example, as was Nareit FFO per share of $2.36 in 2020 versus $2.68 last year. Overall, more cash flow metrics were between approximately flat to modestly higher compared to the same period in 2020. That's 7.2% of the company's market capitalization as of April 8th's close and is not insignificant. There is never a guarantee there won't be share dilution to degrade these numbers, but Omega authorized a $500 million stock repurchase program in Q1 of this year. The more conservative $178.8 million in FAD indicates Q4's financial performance supports a $2.89 annual dividend. Omega's $190.4 million or $0.77 per share in FFO demonstrates healthy margins and $3.08 per share in annualized cash flow generation. Some REITs (or investors) who calculate FAD or CAD may also deduct repayments of principal on mortgage loans". But FAD are often derived by deducting nonrecurring (as well as normal and recurring) capex. While Funds from Operations ("FFO") is a good cash flow estimate for many REITs, Funds Available for Distribution ("FAD") and Adjusted Funds From Operations ("AFFO") are more precise for measuring dividend paying capacity and true cash flow, respectively.Īs explained here, "AFFO deducts the amortization of real estate-related capital expenditures from FFO. It was down 5.3% year-over-year, however, and we care more about cash flow than revenue. Q4's $249.5 million in revenue reinforces that general figure well and beat expectations by $12.33 million. Roughly a billion in rent lands in Omega's mailbox each year. ![]() Given that most or all the readers of this are familiar with Omega Healthcare Investors' ( NYSE: OHI ) basic business model as a triple-net lease REIT focused in the skilled nursing part of healthcare real estate, we'll skip the history of the firm and get right to it. Let's Get Right To It: Omega Healthcare Q4 Earnings Analysis Missouri residence are subject to 8.35% sales tax.This article was coproduced with Williams Equity Research ('WER'). We accept Visa, Mastercard, Discover, Cashier's Checks and Money Orders. If you do not know contact your local FFL dealer. It is your responsibility to know the laws in your area. Please make sure you are not in violation of any local, state, or federal laws and of legal age before writing or calling. Your dealer must email us a copy of their license with your name, make and model number. All Firearms must ship to a licensed (FFL) dealer - no exceptions. We ship UPS and we only ship to the lower 48 states. We DO NOT SHIP Magazines to California,Hawaii,Illinois,Maryland,Massachusetts,New Jersey,New York, Washington D.C. We DO NOT ship guns or magazines to California (LEO Exception, call us or email us with your dept. Please allow 4-5 business days (M-F) for delivery once your item has been marked shipped. We reserve the right to refuse sale to anyone. Quotes on prices are only good for one week from the time quoted. Prices are subject to change on a daily basis. ![]()
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