LTC Properties Offers Investors 6.1% Yield, Nine Consecutive Annual Dividend Hikes (LTC)
By: Ned Piplovic,
LTC Properties, Inc. (NYSE:LTC) continues to grow its annual dividend payouts after nearly a decade of consecutive annual hikes and currently offers its investors a 6.1% dividend yield.
The company’s share price has declined 20% over the past nine months. However, the rising dividend and the above-average yield, as well as abundant liquidity to manage current obligations and invest into expansion, should make this stock attractive to investors looking to augment their portfolios with a steady dividend income right away and a potential asset appreciation over the longer term.
These investors should research LTC Properties’ recent financial operations and fundamentals to determine whether to take a long position. If so, investors should take position prior to the company’s April 19, 2018, ex-dividend date and make sure to be eligible for the next distribution scheduled for the pay date on April 30, 2018.
LTC Properties, Inc. (NYSE:LTC)
Headquartered in Westlake Village, California, and founded in 1992, LTC Properties, Inc. operates as a health care real estate investment trust (REIT). The company invests in senior housing and long-term health care properties, including skilled nursing properties, assisted living properties and independent living properties through mortgage loans, property lease transactions and other investments. As of December 31, 2017, the company’s portfolio stretched across 29 states and comprised approximately 210 properties, including 105 assisted living properties, 96 skilled nursing properties, seven other senior housing properties, two schools and three facilities currently under development in Wisconsin, Kentucky and Illinois.
The company’s share price started the trailing 12 months on a positive note with a 10% increase over the first 90 days. The share price rose from $47.92 on April 4, 2017, to its 52-week high of $52.65 by July 3, 2017. By early August 2017, the share price gave back all its gain from the first 90 days and continued to trade relatively flat for the balance of 2017.
Following the overall market downturn that started in late January 2018, the REIT’s share price continued its decline until it reached its 52-week low of $36.55 on March 23, 2018, for a total loss of more than 30% since the July 2017 peak price. The share price gained 2.7% after the 52-week low and closed on April 3, 2018, at $37.54.
The company’s current $0.19 monthly dividend converts to a $2.28 annualized amount for 2018 and a 6.1% forward yield. This current yield is 21.5% above the REIT’s own 5% average yield over the past five years. In addition to exceeding the REIT’s own recent average, the current 6.1% yield is 62% higher than the 3.76% average yield of the entire Financials sector. Furthermore, the company’s yield exceeds the 5.43% average yield of the Healthcare Facilities REITs market segment by nearly 12%.
While most REITs and other companies in the Financial sector cut their dividend payout during or after the 2008 financial crisis, LTC Properties managed merely to suspend its rising dividend for one year. After paying the same $1.56 total annual dividend in 2009 as it did in 2008, the REIT resumed its rising dividend policy in 2010. Over the past eight consecutive years, LTC Properties enhanced its total annual payout nearly 50% by growing the dividend distribution amount at an average rate of 4.3% per year. Even with the missed hike in 2009, the REIT hiked its annual dividend at an average rate of 12.3% per year and enlarged its total annual amount by 470% over the past 15 years.
While the current share price trades at a 20% discount versus its level from one year ago, the long-term trendline does provide some level of confidence that the share price could recover and return moderate asset gains to accompany the continuously rising dividend income distributions.
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