A few months prior, we profiled Omega Healthcare (NYSE:OHI) and found it to be one of the most attractive healthcare REITs in our coverage universe. Recent results do nothing to disconfirm our thesis, and in fact, the performance strengthens our conviction in the company. During its fourth quarter, Omega saw its adjusted funds from operations jump 16% year-over-year to $0.58 per share, easily exceeding estimates. Revenue was also slightly better than the consensus anticipated, jumping 25% year-over-year to $95 million thanks to the acquisition of several new properties throughout the year.
For the full year, Omega earned $2.06 per share in funds from operations, up 22% compared to 2011. The firm made several investments in new properties that have been accretive to earnings, and we think this trend will continue into 2013. As a result, Omega increased its payout by a penny to $0.45 per share -- an annual yield of nearly 7% at current levels. We plan to update our dividend report soon.
As long as debt costs remain low, refinancing and borrowing could be very useful for the company. Omega entered into a new revolving credit facility at the end of 2012 that essentially gives it $700 million in additional financial flexibility. Earlier in the year, the firm paid off $175 million worth of 7% Senior Notes with proceeds from a $400 million issuance of 5.875% notes. It's hard not to like the balance sheet improvements Omega has completed during 2012.
Looking ahead, the firm offered very solid guidance of adjusted FFO per share of $2.45-$2.50, and adjusted funds available for distribution of $2.20-$2.25 per share. Although the company is eager to put cash to work in a low interest rate environment, we think the firm will raise its payout yet again. Cap rates (rental income/asset value) are considerably higher in Omega's space than in others, mostly the result of higher perceived risk from the market. With less interested players and higher returns, Omega looks well-positioned going forward.
Although shares are trading near the low end of our fair value range, we're strongly considering adding the company to the portfolio of our Dividend Growth Newsletter. Solid valuation upside, combined with a huge dividend yield (almost 7% at current levels) makes Omega a very attractive dividend growth investment.