Key Takeaways
- Omega Healthcare Investors raised its quarterly dividend to $0.68 in July, and its shares yield 6.1%, against 6.7% for Healthpeak Properties.
- Healthpeak paid out 72% of its AFFO in fiscal 2025, against 91% for Omega, with 78% and 87% expected for fiscal 2026.
- Omega carries much less debt, while Healthpeak has cut its dividend twice since fiscal 2016.
- Healthpeak trades at 12.2x forward AFFO, below its five-year average of 14.7x.
Omega Healthcare Investors (OHI) raised its quarterly dividend to $0.68 a share on July 23, from $0.67. It’s a small step, but it ends six straight fiscal years, 2020 to 2025, at the same $2.68 a share.
For income investors hunting for a yield above 6% in healthcare real estate, Healthpeak Properties (DOC) is the obvious alternative. Its monthly dividend yields 6.7%, and it raised its full-year guidance on Aug. 4.
Both are REITs, so I’ll judge each on its AFFO payout ratio. Which is the better high-yield dividend stock?
| Metric | Omega Healthcare (OHI) | Healthpeak (DOC) |
|---|---|---|
| Dividend yield | 6.1% | 6.7% |
| Current dividend | $2.72 a year, quarterly | $1.22 a year, monthly |
| Dividend growth, fiscal 2020–2025 | 0.0% a year | -3.8% a year |
| AFFO payout ratio, fiscal 2025 | 91% | 72% |
| AFFO payout ratio, fiscal 2026 consensus | 87% | 78% |
| Net debt/EBITDA (LTM) | 3.5x | 5.44x |
| Interest coverage, EBIT/interest (LTM) | 3.89x | 1.49x |
Omega’s raise rests on a thin cushion
Omega has been reshaping its tenant list. It moved 20 Ciena facilities, where coverage was a weak 0.87x, to stronger operators, and it sold 18 CommuniCare facilities in the second quarter for $480 million. It’s adding senior housing and U.K. care homes, and NOI rose to $331 million in Q2 2026 from $281 million in Q2 2025. On Oct. 5, it said it had moved 32 Florida skilled nursing facilities to PACS Group, with their rent set to rise $26.1 million in the first year.
Management said the board raised the dividend on improved coverage and a shorter watch list. The cushion is still thin, though. AFFO fell from $3.14 a share in fiscal 2021 to $2.62 in fiscal 2023, when the dividend ate up 102% of it, before recovering to $2.96 in fiscal 2025, for a tight 91% payout ratio.
Consensus expects a bit more room in fiscal 2026, at 87%.
The main risk is its operators. Genesis is in Chapter 11, though it’s still paying its full $13.3 million a quarter in rent. And the Florida move came with a one-time expense of about $90 million, which Omega didn’t explain.
Healthpeak has more room, and more debt
Where Omega’s cushion is thin, Healthpeak’s is the widest it’s been in a decade. It got there the hard way: Healthpeak cut its dividend from $2.10 a share in fiscal 2016 to $1.48 in fiscal 2017, and again to $1.20 in fiscal 2021. Since then, AFFO climbed from $1.35 a share in fiscal 2021 to $1.69 in fiscal 2025 while the dividend barely moved, taking the payout ratio from 89% to a comfortable 72%.
Consensus sees AFFO slipping from $1.69 in fiscal 2025 to $1.57 in fiscal 2026. Even then, the dividend would take a well-covered 78%.
The business has momentum. Janus Living, its senior housing arm, grew revenue 45% in Q2 2026 from Q2 2025, and lab occupancy rose 80 basis points from the first quarter to 78.5%. Lab same-store NOI still fell 3.2% in Q2 2026 from a year earlier.
The risk is debt: 5.44x EBITDA against Omega’s 3.5x, with EBIT covering interest a weak 1.49x. CEO Scott Brinker seems to agree it matters, saying on the Q2 call: “This is not the right environment to have elevated leverage.”
So which dividend wins?
Healthpeak is the better high-yield dividend stock. It pays the bigger yield, and it covers it with far more room: 72% of AFFO in fiscal 2025 and 78% expected for fiscal 2026, against 91% and 87% at Omega. AFFO is counted after interest, so that cushion is what’s left once the lenders are paid.
At each dividend’s pace now (Healthpeak’s 1.7% rise in fiscal 2025, Omega’s none), $10,000 in Healthpeak pays $670 a year today and about $777 in year 10, against a flat $610 from Omega. Healthpeak’s five-year rate of -3.8% a year runs from its 2021 cut. At that rate, Omega’s income would pass it by 2029.
And you’re not paying up for the extra room. Healthpeak trades at 12.2x forward AFFO, below its five-year average of 14.7x and far from its 25.7x peak in October 2021, though above the 9.9x low it hit in December 2025.
This isn’t to say Omega’s dividend is in trouble. It hasn’t fallen in any fiscal year since 2016, it just got a raise, and Omega’s balance sheet is far stronger. It’s just that I’d rather own the dividend with room to spare than one that has used more than 90% of its AFFO four years running.
Of course, Healthpeak’s lab business still has to turn. Watch whether lab occupancy keeps climbing from 78.5% when it reports its third quarter.
So what is Healthpeak stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Healthpeak could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
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