Dividends4Life: A 10.9% Yield That’s Future-Proof?

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A 10.9% Yield That’s Future-Proof?

Posted by D4L | Thursday, April 09, 2020 | | 0 comments »

If you’ve been following dividend stocks, you’d know that most of the ultra-high-yielding names aren’t really the best long-term plays. The No. 1 concern is dividend safety, or rather the lack of it. We have seen plenty of instances in which a double-digit yielder made oversized dividend payments for a while, but had to cut them eventually because the business couldn’t really afford the payout. If you want to live off dividend income, you better not have the words “dividend cut” associated with any of your portfolio companies.

Still, that doesn’t mean we should ignore ultra-high yielders completely. For instance, Omega Healthcare Investors Inc (NYSE:OHI), a real estate investment trust (REIT) that offers a double-digit dividend yield at the time of this writing, is actually well positioned for the decades to come. Headquartered in Hunt Valley, Maryland, Omega invests in the long-term healthcare industry. As of December 31, 2019, the REIT’s portfolio consisted of 964 operating healthcare facilities, with 83.8% being skilled nursing/transitional care facilities and 16.2% being senior housing properties. The company offers a massive yield and already has the ability to cover its payout. Adding in a strong demographic tailwind, this REIT could deliver some serious returns to investors down the road.

Source: InvestotPlace

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