Critical Review: LTC Properties (LTC) versus Care Capital Properties (CCP)
LTC Properties (NYSE: LTC) and Care Capital Properties (NYSE:CCP) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitabiliy, institutional ownership and earnings.
This is a breakdown of current ratings for LTC Properties and Care Capital Properties, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Care Capital Properties||0||3||1||0||2.25|
LTC Properties presently has a consensus target price of $52.67, indicating a potential upside of 3.80%. Care Capital Properties has a consensus target price of $26.00, indicating a potential upside of 0.85%. Given LTC Properties’ higher probable upside, equities analysts plainly believe LTC Properties is more favorable than Care Capital Properties.
Volatility and Risk
LTC Properties has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Care Capital Properties has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.
LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 4.5%. Care Capital Properties pays an annual dividend of $2.28 per share and has a dividend yield of 8.8%. LTC Properties pays out 102.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Care Capital Properties pays out 121.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Care Capital Properties has increased its dividend for 5 consecutive years. Care Capital Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares LTC Properties and Care Capital Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Care Capital Properties||45.61%||13.48%||5.60%|
Insider & Institutional Ownership
82.9% of LTC Properties shares are held by institutional investors. Comparatively, 86.7% of Care Capital Properties shares are held by institutional investors. 1.7% of LTC Properties shares are held by company insiders. Comparatively, 2.3% of Care Capital Properties shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares LTC Properties and Care Capital Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|LTC Properties||$165.48 million||12.13||$147.17 million||$2.22||22.86|
|Care Capital Properties||$335.69 million||6.45||$308.17 million||$1.88||13.71|
Care Capital Properties has higher revenue and earnings than LTC Properties. Care Capital Properties is trading at a lower price-to-earnings ratio than LTC Properties, indicating that it is currently the more affordable of the two stocks.
About LTC Properties
LTC Properties Inc. is a healthcare real estate investment trust (REIT). The Company invests in senior housing and healthcare properties through sale-leaseback transactions, mortgage financing and structured finance solutions, including mezzanine lending. It invests in various properties, including Skilled nursing facilities (SNF), Assisted living facilities (ALF), Independent living facilities (ILF), Memory care facilities (MC) and Range of care facilities (ROC). SNF provides restorative, rehabilitative and nursing care. Many skilled nursing facilities provide ancillary services that include occupational, speech, physical, respiratory and IV therapies, as well as sub-acute care services, which are paid either by the patient, the patient’s family, private health insurance, or through the federal Medicare or state Medicaid programs. ALF serves people requiring assistance with activities of daily living, but do not require the constant supervision skilled nursing facilities provide.
About Care Capital Properties
Care Capital Properties, Inc. is a self-administered, self-managed real estate investment trust with a diversified portfolio of skilled nursing facilities (SNFs) and other healthcare assets operated by private regional and local care providers. The Company leases its properties to unaffiliated tenants under long-term triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs and taxes. It also manages a small portfolio of secured and unsecured loans, made primarily to its SNF operators and other post-acute care providers. As of December 31, 2016, its portfolio consisted of 345 properties operated by 38 private regional and local care providers, spread across 36 states and containing a total of approximately 38,000 beds/units. It conducts all of its operations through its operating partnership, Care Capital Properties, LP, and its subsidiaries.
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