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LTC Properties (LTC)
NYSE:LTC
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LTC Properties
(NYSE:LTC)72Outperform
Positive Factors
Leverage and valuation
Valuation is attractive with a price target based on a multiple derived by using a combination of leased and SHOP peers while considering LTC’s low leverage profile.
Long-term growth strategy
Management is enhancing the company’s long-term organic growth rate by establishing a SHOP/RIDEA portfolio.
Negative Factors
Investment activity
Disappointingly, no new investments were disclosed.
LTC Properties (LTC) vs. S&P 500 (SPY)
Market Cap
$1.62B
Dividend Yield6.39%
Average Volume (3M)358.74K
Price to Earnings (P/E)17.5
Beta (1Y)0.67
Revenue Growth6.54%
EPS Growth-4.13%
CountryUS
Employees23
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)2.05
Shares Outstanding45,450,610
10 Day Avg. Volume392,205
30 Day Avg. Volume358,740
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)N/A
Price to Sales (P/S)7.75
Price to Cash Flow (P/CF)12.20
P/FCF Ratio13.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.00Price Target Upside5.76% Upside
Rating ConsensusHold
Number of Analyst Covering5
LTC Properties Business Overview & Revenue Model
Company DescriptionLTC Properties, Inc. is a real estate investment trust (REIT) that primarily invests in seniors housing and healthcare properties. The company focuses on acquiring and managing a diverse portfolio of long-term care and other healthcare-related facilities, including skilled nursing facilities, assisted living facilities, and independent living communities across the United States. By specializing in this sector, LTC Properties aims to provide capital solutions to healthcare operators while delivering consistent returns to its shareholders.
How the Company Makes MoneyLTC Properties makes money through rental income generated from leasing its properties to healthcare operators. The company's revenue model is primarily based on long-term triple-net lease agreements, where tenants are responsible for paying property-related expenses such as taxes, insurance, and maintenance, in addition to the rent. This structure ensures a stable and predictable income stream for LTC. Furthermore, LTC Properties may engage in mortgage loan agreements with healthcare operators, earning interest income. Strategic partnerships and relationships with experienced operators contribute significantly to the company's earnings by ensuring high occupancy rates and operational efficiency across its properties.
LTC Properties Financial Statement Overview
Summary
LTC Properties showcases solid financial performance with consistent revenue growth, high profitability margins, and robust cash flow generation. The balance sheet is stable with moderate leverage, positioning the company well within the REITs sector.Income Statement
LTC Properties has demonstrated steady revenue growth with a current annual increase of 6.4%. The company maintains strong profitability with a gross profit margin of 99.6% and a net profit margin of 43.4%. The EBIT and EBITDA margins are also robust at 44.1% and 61.4% respectively, indicating efficient cost management and operational performance.78
Positive
Balance Sheet
The balance sheet shows a solid equity ratio of 53.8%, reflecting a stable financial structure. However, the debt-to-equity ratio stands at 0.61, highlighting moderate leverage. The return on equity remains strong at 9.5%, suggesting efficient use of shareholder funds.72
Positive
Cash Flow
LTC Properties reports a healthy free cash flow growth rate of 19.9%. The operating cash flow to net income ratio is 1.37, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 1.37 as well, underscoring effective cash flow management.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 209.85M | 197.24M | 175.15M | 155.32M | 159.34M | Gross Profit |
| 196.92M | 182.83M | 159.67M | 139.93M | 144.27M | EBIT |
| 92.44M | 89.96M | 99.08M | 80.57M | 95.63M | EBITDA |
| 171.58M | 175.89M | 136.58M | 93.10M | 134.70M | Net Income Common Stockholders |
| 91.04M | 89.73M | 100.02M | 27.07M | 65.91M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 935.26M | 20.29M | 10.38M | 5.16M | 7.77M | Total Assets |
| 1.79B | 1.86B | 1.66B | 1.50B | 1.46B | Total Debt |
| 584.79M | 891.32M | 767.85M | 722.72M | 649.38M | Net Debt |
| 575.38M | 871.03M | 757.48M | 717.56M | 641.61M | Total Liabilities |
| 733.14M | 938.83M | 805.80M | 759.70M | 683.68M | Stockholders Equity |
| 960.63M | 881.28M | 828.37M | 736.71M | 767.40M |
| Cash Flow | Free Cash Flow | |||
| 125.17M | 104.40M | 96.59M | 84.89M | 115.75M | Operating Cash Flow |
| 125.17M | 104.40M | 105.59M | 91.18M | 116.10M | Investing Cash Flow |
| 90.68M | -174.91M | -119.95M | -69.79M | 43.93M | Financing Cash Flow |
| -226.72M | 80.42M | 19.58M | -24.01M | -156.50M |
LTC Properties Technical Analysis
Positive
35.93
Price Trends
34.28
Positive
35.47
Positive
34.86
Positive
Market Momentum
0.32
Negative
66.42
Neutral
89.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTC, the sentiment is Positive. The current price of 35.93 is above the 20-day moving average (MA) of 34.58, above the 50-day MA of 34.28, and above the 200-day MA of 34.86, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 66.42 is Neutral, neither overbought nor oversold. The STOCH value of 89.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LTC.
LTC Properties Risk Analysis
LTC Properties disclosed 35 risk factors in its most recent earnings report. LTC Properties reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LTC Properties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $98.70B | 186.70 | 3.32% | 1.70% | 20.40% | 57.80% | |
76 Outperform | $10.54B | 24.88 | 8.96% | 7.17% | 9.90% | 56.41% | |
72 Outperform | $1.62B | 17.47 | 9.48% | 6.39% | 6.54% | -4.13% | |
63 Neutral | $4.05B | 31.73 | 4.57% | 7.14% | 7.22% | 809.92% | |
63 Neutral | $31.32B | 358.18 | 0.80% | 2.58% | 9.48% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
LTC
LTC Properties
35.93
6.22
20.94%
WELL
Welltower
154.85
64.72
71.81%
OHI
Omega Healthcare
37.55
8.82
30.70%
SBRA
Sabra Healthcare REIT
17.09
4.32
33.83%
VTR
Ventas
70.47
28.48
67.83%
LTC Properties Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: 3.04% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a period of transition and strategic shifts for LTC Properties. While there are some challenges like the decrease in net income and lease non-renewals, the introduction of the RIDEA platform and improved liquidity suggest potential for future growth. The sentiment is balanced with significant strategic advancements and ongoing financial challenges.Highlights
RIDEA Platform Introduction
LTC is transitioning from triple net leases to RIDEA structures, targeting $150 million to $200 million in initial gross investment assets. This strategy is expected to be transformative and unlock long-term growth potential.
Improvement in Liquidity
Total liquidity increased to approximately $680 million from $229 million at the end of September 2024. Debt to annualized adjusted EBITDA for real estate decreased to 4.3 times from 4.7 times.
Successful Debt Management
LTC repaid $95.8 million under its unsecured revolving line of credit and entered into a new $400 million ATM program.
Strong Operator Performance
ALG and Prestige have shown solid performance with no deferral concessions and increased occupancy by 740 basis points respectively.
Lowlights
Decrease in Net Income
Net income available to common shareholders decreased by $10.1 million, primarily due to a decrease in gain on sale, an increase in impairment losses, and higher G&A expenses.
Operator Lease Non-Renewal
One operator in the top 10 has decided not to renew their lease, leading LTC to plan the sale of seven skilled nursing centers.
Core FFO Decline
Core FFO per share was $0.65 in Q4 2024 compared with $0.66 per share in Q4 2023, indicating a slight decline.
Company Guidance
During the fourth quarter 2024 earnings call, LTC Properties, Inc. provided several key metrics and guidance for the upcoming year. The company highlighted its strategic shift towards the RIDEA platform, aiming to transform $150 million to $200 million in existing triple net leases into RIDEA structures, with conversions expected by the second quarter of 2025. This move is anticipated to yield an 8% return on investment and is expected to be earnings-neutral in the first year. LTC also reported a decrease in net income by $10.1 million compared to the previous year, attributed to higher impairment losses and G&A expenses, although FFO excluding non-recurring items improved by $2.1 million due to lower interest expenses and increased interest income from construction loan funding. The company maintained a strong liquidity position with approximately $680 million available and reduced its debt to annualized adjusted EBITDA ratio to 4.3 times. For the first quarter of 2025, LTC provided guidance for core FFO to be between $0.64 and $0.65 per share.LTC Properties Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
LTC Properties Announces Leadership Changes for 2024
Positive
Dec 9, 2024
LTC Properties, a real estate investment trust specializing in seniors housing and healthcare properties, announced key leadership changes effective December 31, 2024. Wendy Simpson will transition to Executive Chairman, while Pam Kessler and Clint Malin become Co-Chief Executive Officers. Cece Chikhale steps up as Chief Financial Officer, continuing her roles as Principal Accounting Officer and Treasurer. These appointments align with LTC’s succession plan, with the company poised for future growth through strategic investments.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.