(10-12-2018, 11:53 AM)crimsonghost747 Wrote: Curious to know why you let go of OHI at this point? I'm aware of the issues they have but now that people are starting to panic again I think a high yielding healthcare REIT is not a bad place to keep some money in.
I'm horrible at timing but so far this seems ok. At the open I bought RTN puts @ 190 for next week's Friday. Purely a protective play, let's see how it goes.
I'll probably do half of my monthly buys on Monday and the other half later on depending on where the market seems to be heading.
I had a modest long-term gain on my holding, which goes back to 2016. They paid me a nice dividend during that time period, which I invested into a number of other holdings. My overall portfolio weight in the REIT sector was slightly higher than I wanted (already own O, NNN, FRT, SKT, WPC). Credit rating is BBB- (I typically want BBB+ or better when making a purchase). FFO and FAD guidance were recently adjusted downwards by OHI, with FAD now at at an estimated range of $2.67-$2.74 per share. This guidance leaves almost no margin for error for a company paying a $2.64 annual dividend, and with current forecast growth prospects essentially flat. I do not view the OHI dividend as having a high margin of safety or any meaningful near-term growth prospects.
On the other hand, KMB has a 46-year history of dividend raises, is trading near the top-end of its historical yield range, has an A credit rating, has averaged roughly 6.5% annual dividend growth over a 5 and 10-year period, and its 80% payout ratio, whilst not exceptional (I typically like below 75%), is fine for a boring consumer staples company with steady cash flows that have grown consistently over the long term (despite year-to-year variation). KMB is a SWAN, OHI is not. I'm okay with trading a bit of yield for consistency and stability.