LTC Properties Inc's Dividend Analysis
Unpacking the Dividend Performance and Sustainability of LTC Properties Inc
LTC Properties Inc (NYSE:LTC) recently announced a dividend of $0.19 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-20. 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 delve 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 invests in healthcare facilities through mortgage loans, property lease transactions, and other investments. Generating all of its revenue in the United States, LTC is an active capital provider in the seniors housing and healthcare real estate industry, 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, with dividends currently distributed on a monthly basis. The company has increased its dividend each year since 2002, earning it the title of a dividend achiever. This honor is given to companies that have increased their dividend each year for at least the past 21 years.
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 7.19% and a 12-month forward dividend yield of 7.19%. This suggests an expectation of the 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 2.30%. 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 7.19%.
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 2023-06-30, LTC Properties Inc's dividend payout ratio is 1.34, suggesting that the company's dividend may not be sustainable.
LTC Properties Inc's profitability rank of 8 out of 10 as of 2023-06-30, suggests 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. 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 7.10% per year on average, a rate that underperforms approximately 42.39% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -6.30% underperforms approximately 76.98% of global competitors.
Conclusion
In conclusion, while LTC Properties Inc has a commendable track record of consistent and growing dividends, its high payout ratio raises questions about the sustainability of its dividends. However, its profitability and growth metrics present a mixed picture. While the company has a good profitability rank and a solid 3-year EPS growth rate, its revenue growth and EBITDA growth rates lag behind many global competitors. Therefore, investors need to weigh these factors carefully when considering LTC Properties Inc's dividend prospects.
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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.
