LTC
LTC Properties, Inc.
$39.67
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Mild
·
Conviction
Fair Value
Trading 11.7% below fair value
You pay
$39.67
Bear
$35.23
Fair
$44.92
Bull
$54.62
Bear
$35.23
-11.2%
$3.04 FFO × 16x
Fair
$44.92
+13.2%
$3.04 FFO × 20x
Bull
$54.62
+37.7%
$3.04 FFO × 25x
Key Value Driver
FFO/share ($3.04) × healthcare P/FFO multiple
Implied Market Multiple
13.0x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $37.29 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $44.92 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
The 1.9% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $14.16 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $37.29 (from 22 analysts). Our estimate is 27% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify