Could Omega Healthcare Investors Be in Trouble?
Omega Healthcare Investors' (NYSE: OHI) business has been facing major headwinds since the start of the COVID-19 pandemic in 2020. The stock is down materially from its 2020 highs, but has rallied nearly 13% so far in 2022 (with most of that advance coming in just the last three months). The broader real estate investment trust (REIT) sector is down 12% over that same span, putting Omega's relative outperformance at roughly 25%.
But Omega's troubles haven't suddenly gone away, so investors may need to rethink their view of the stock. Here's why.
Even when times were better, owning nursing homes was a hard business to be in. These properties differ from other senior housing assets because third-party payment, notably Medicare and Medicaid, is the primary source of rental income. That puts a very political spin on revenues and can lead to changes in the business environment, potentially material ones, that are hard to predict.
Source Fool.com
