LTC
LTC Properties, Inc.
$41.81
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Mild
·
Conviction
Fair Value
Trading 11.9% below fair value
You pay
$41.81
Bear
$37.23
Fair
$47.47
Bull
$57.71
Bear
$37.23
-11.0%
$3.04 FFO × 16x
Fair
$47.47
+13.5%
$3.04 FFO × 20x
Bull
$57.71
+38.0%
$3.04 FFO × 25x
Adjust Assumptions
20.3x
$
Key Value Driver
FFO/share ($3.04) × healthcare P/FFO multiple
Implied Market Multiple
13.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$49.67
Divergence from AlphaVal
4%
Summary
At $3.04 FFO/share with a 20x healthcare REIT multiple, the base-case value is $47.47 per share. Dividend yield: 1.8%. DDM cross-check: $14.16.
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 1.8% 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.
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