DGI Adventure – 10-28-2015 Limit Order Executed – Omega Health Care Investors Inc. (OHI) – $36.00/share

LOE – Limit Order

I had decided to purchase OHI shares in my ROTH IRA long
before I had come up with my investment thesis structure, so I don’t have one
to reference. Today I bought 46 shares of OHI at a price of $36.00/share for a
total investment of $1,662.95 (including $6.95 trade commission).

The limit order was originally set for 47 shares at an even $32.00/share
on 8/24/15. It was so close to being executed. On 9/4/15 the intraday low was
$32.01. On 9/8 it dipped to $32.16. That was it. From there it shot up to over

On October 14, OHI announced
another dividend increase
. Not only are they a dividend contender having raised
their dividend 13 consecutive years, they’re currently on a streak of raising
their dividend 13 quarters in a row. That’s pretty impressive.

OHI goes ex-dividend tomorrow, which means today was my last
day to get in on this quarter’s dividend. With a market yield over 6%, a strong
growth history, and a do-nothing FOMC leaving interest rates at zero, I don’t
really see OHI dropping 10% any time soon to get back in that $32 range. I made
the decision to go ahead and raise the limit order in the hope I could get the
shares in time for ex-dividend day. It worked and now I’m the proud owner of 46 beautiful shares.

I had earned some dividend income since the original order
was placed and I had spent a little less on the other investments than planned,
so even at the higher price, I could buy nearly the same number of shares with
my remaining cash. As much as I love trying to get a nice temporary low for a
purchase price, I’m really after the income. In this case I chose to ignore the
share price in order to lock in the income. This has a lot to do with the fact that this is in my ROTH IRA. The amount of fresh capital that can be added per
year is capped at $5,500. I want to earn cash so I can invest in more
securities with less commission. I need my money working for me if I’m going to
earn that cash between now and next year. Waiting around too long for the perfect entry point is ultimately a
disservice if it means missing out on a big dividend. And on ex-dividend day eve, when I am literally down to my last
shopping day…bargains might not be available. I’m okay with that.

By purchasing one less share than originally planned, I’m
giving up $2.24 in income based on the current dividend. That is the difference
between $105.28 versus $103.04 in annual income. By acting now I know I’ll have an extra $25.76
of cash to invest on top of next year’s $5,500 contribution than I would have if
I missed out on this quarter’s dividend.

And what if OHI’s
share price just goes up over the next quarter and I dither around and wait
even longer for the perfect entry point? I was so close to getting OHI at
$32.00/share. Literally within $0.01/share. Oh well. I didn’t. 

Sometimes you spend more time fishing
than catching…and that’s the fun of it. Other times you need to catch something
because you’re hungry. I hope I can tell the difference, and act appropriately
for the situation.

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