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LTC Properties: A 5.1% Yielding Monthly Paying REIT Best Left Untouched

Published Sun, 17 Mar 2019 14:43:15 -0400 on Seeking Alpha

LTC Properties (LTC) is one of those rare monthly dividend paying stocks that gets investors all excited on Seeking Alpha. Additionally, the company's yield at 5.1% is nothing to sneeze at either. We look at this one today and explain why we have enough going on under the hood to stay away at this point.
The Business
LTC Properties is a diversified healthcare REIT with investments predominantly in skilled nursing facilities (SNFs) and assisted living senior homes. At the year-end December 2018, LTC portfolio included 197 properties valued at over $1.67 billion.

Source: LTC Properties Q4-2018 Supplemental
The healthcare facilities are all over the United States; however, just like many other operators we cover, there is an abnormal concentration in Texas which accounts for roughly one-sixth of the total portfolio.

Source: LTC Properties Q4-2018 Supplemental

Source: LTC Properties Q4-2018 Supplemental
Where the Plot Thickens
As with other investments in this space, the view from up high looks fine, but the devil truly does reside in the details. LTC Properties has a concentrated profile of operators and tenants with the top 5 accounting for about 55% of the total income. The largest tenant, Prestige Healthcare, accounts for 18.0 percent of its annual income. We have highlighted the top 5 and one additional tenant that we shall go on to discuss.

Source: LTC Properties Q4-2018 Supplemental
Problem - Tenant 1
If... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SABRA HEALTHCARE REIT 21.54   195.8 0.11 1.80 8.31


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