LTC Properties Inc's Dividend Analysis

GuruFocus Research

Mon, Feb 19, 2024, 3:07 AM 4 min read

Understanding the Dividend Dynamics of LTC Properties Inc

LTC Properties Inc (NYSE:LTC) recently announced a dividend of $0.19 per share, payable on 2024-02-29, with the ex-dividend date set for 2024-02-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into LTC Properties Inc's dividend performance and assess its sustainability.

What Does LTC Properties Inc Do?

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LTC Properties Inc is a healthcare facility real estate investment trust. The company operates one segment that works to invest in healthcare facilities through mortgage loans, property lease transactions, and other investments. LTC generates all of its revenue in the United States. LTC is an active capital provider in the seniors housing and healthcare real estate industry. The company has been actively engaged with its operating partners to create a growing pipeline of projects.

A Glimpse at LTC Properties Inc's Dividend History

LTC Properties Inc has maintained a consistent dividend payment record since 2002. Dividends are currently distributed on a monthly basis.

LTC Properties Inc has increased its dividend each year since 2002. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 22 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down LTC Properties Inc's Dividend Yield and Growth

As of today, LTC Properties Inc currently has a 12-month trailing dividend yield of 7.24% and a 12-month forward dividend yield of 7.24%. This suggests an expectation of same dividend payments over the next 12 months.

And over the past decade, LTC Properties Inc's annual dividends per share growth rate stands at 1.60%. Based on LTC Properties Inc's dividend yield and five-year growth rate, the 5-year yield on cost of LTC Properties Inc stock as of today is approximately 7.24%.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, LTC Properties Inc's dividend payout ratio is 1.29, which may suggest that the company's dividend may not be sustainable.

LTC Properties Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks LTC Properties Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. LTC Properties Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.

Revenue is the lifeblood of any company, and LTC Properties Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. LTC Properties Inc's revenue has increased by approximately 5.50% per year on average, a rate that outperforms approximately 68.01% of global competitors.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, LTC Properties Inc's earnings increased by approximately 1.90% per year on average, a rate that outperforms approximately 51.88% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of -6.90%, which outperforms approximately 24.36% of global competitors.

Next Steps

In conclusion, LTC Properties Inc's dividend payment history and growth rate indicate a strong commitment to returning value to shareholders. However, the high dividend payout ratio raises questions about sustainability, which are somewhat mitigated by the company's solid profitability and growth metrics. Investors should monitor these factors closely, as they will play a critical role in the company's ability to maintain its dividend payments. As value investors, it is crucial to understand the balance between dividend yields and the fundamental strength of the company to ensure investment decisions are well-informed and strategic.

GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

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