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OHI – Market expectations are for Uniform ROA to continue fading, but management may be concerned about liquidity, occupancy, and investments

October 20, 2020

  • Omega Healthcare Investors, Inc. (OHI:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 21.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about cash and liquidity levels, occupancy rates, and their investment portfolio
  • Specifically, management may be concerned about their current cash and liquidity levels, the increase in average operator expenses, and the limitations to deals they can do during the pandemic. Moreover, they may lack confidence in their ability to maintain increased revenue in the next quarters, mitigate the decline of occupancy rates, and sustain the overall senior housing investment portfolio.