LTC PROPERTIES INC (LTC): what the price requires
The current priced-in claim for LTC PROPERTIES INC (LTC) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/LTC
Headline
| Field | Value |
|---|---|
| Ticker | LTC |
| Company | LTC PROPERTIES INC |
| Current price | $39.67/sh |
| Composition | Real Estate Investments 72% / SHOP 28% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 13.1x |
| FFO yield | 7.6% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8.3% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.42σ |
| cohort percentile (of 88 peers) | 33 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.37x | 5 | expensive |
| Earnings | 3.05x | 5 | expensive |
| Relative | 0.96x | 6 | justifies |
| Growth | 0.75x | 4 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.
Per-Model Detail (n=20)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $129.21 | 0.31x | yes | FCF base $0.2B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.6%, 7yr projection |
| DCF Exit Multiple | Growth | $58.07 | 0.68x | yes | Exit EV/EBITDA: 6.8x / 9.8x / 12.8x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $81.04 | 0.49x | yes | P/E 26.01x (blended: static sector reference 35x + trailing (TTM) 13x), scenarios: 20.8x / 26.0x / 31.2x (bear / base = reference held flat / bull), EV/EBITDA 15.94x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $47.47 | 0.84x | yes | Stage 1: 6% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $26.69 | 1.49x | yes | BV/sh $22.67, ROE (TTM) 10.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $28.87 | 1.37x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $48.38 | 0.82x | yes | Rev $0.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 5.0x / 6.3x / 7.5x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $38.04 | 1.04x | yes | FFO/share $3.17, growth 6% (input: historical FFO/share growth, 10y median), PEG=2.75 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $6.29 | 6.31x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.12B × (1−21%) / WACC 7.6% → EPV (no growth) |
| Residual Income | Asset | $29.29 | 1.35x | yes | BV $22.67 + 5yr PV of (ROE (TTM) 10.9% − Kₑ 9.3%) × BV; BV grows 7.1%/yr |
| Graham Number | Asset | $40.21 | 0.99x | yes | √(22.5 × FFO/share $3.17 × BVPS $22.67) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $98.43 | 0.40x | yes | EBITDA $0.28B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $13.01 | 3.05x | yes | FCF $137.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $10.99 | 3.61x | yes | SBC-adj FCF $0.13B (FCF $0.14B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $53.67 | 0.74x | yes | FFO/share $3.17 × (8.5 + 2×5.8%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.78 | 5.85x | yes | BV $22.67 × (ROIC 2.3% / WACC 7.6%) |
| P/Sales Sector | Relative | $37.89 | 1.05x | yes | Revenue $0.31B × sector P/S 6.0x |
| PEG Fair Value | Relative | $27.82 | 1.43x | yes | FFO/share $3.17 × (PEG 1.5 × growth 5.8% (input: historical FFO/share growth, 10y median)) → PE 8.8x |
| Earnings Yield | Earnings | $34.27 | 1.16x | yes | FFO/share $3.17 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $44.92 | 0.88x | yes | FFO/share $3.17 × 14.2x P/FFO (route cohort median, n=85); FFO $0.16B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 49M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $845.8m |
| Net debt / FFO | 5.45x |
| Funds from operations (trailing) | $155.2m |
| Share count CAGR (dilution) | 5.6% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- LTC is converting from a fixed-rent healthcare landlord into a direct operator of seniors housing, targeting roughly 40% of net operating income from its SHOP segment by year-end to capture occupancy and rate growth the old triple-net model could not.
- The biggest risk is the transition itself: SHOP exposes LTC directly to seniors-housing labor costs and operating volatility, competing against far larger operating platforms at Welltower and Ventas, and the dividend has been held flat rather than raised.
- Watch SHOP net operating income and the dividend: the price near a 5.9% yield is supported by funds from operations, but the growth depends on a $600 million 2026 acquisition program funded partly by equity issuance delivering its expected returns.
Bull Case
Read the methods that fit a real estate company and the price looks reasonable: against funds from operations, the cash a property owner actually keeps, the relative and growth lenses land near or above the price. The earnings-power methods that flag the stock as expensive are the wrong tool here, because they punish a REIT for the depreciation that makes its reported earnings look thin while its cash flow stays healthy. LTC generates FFO of about $3.17 per share, and the business sits on a clean enough base to support a dividend it has paid for 25 consecutive years, currently yielding close to 5.9%. For an income investor, that combination of cash coverage and dividend durability is the core of the case.
The transformation underway is what could lift the growth rate. LTC is converting from a pure triple-net landlord, which collects fixed rent and captures none of the upside when its tenants' buildings fill up, into a model that participates directly in seniors-housing operations. The 10-K describes the mechanics, noting it has moved communities "covered by the master lease into our SHOP segment" where the communities are "operating and accounted for as one community." Under that structure LTC captures net operating income directly rather than a fixed rent check, so as occupancy and rates recover in seniors housing, the income flows to LTC instead of being capped. Management is pushing this hard: roughly $570 million of recent seniors-housing acquisitions plus a planned $600 million of 2026 SHOP additions, funded partly by about $265 million of skilled-nursing divestitures, are expected to take SHOP to roughly 40% of annualized net operating income by year-end.
The demographic tailwind behind the strategy is the most durable part. The population aged 80 and over, the prime consumer of seniors housing, is growing fast, and new supply has been constrained by years of high construction costs and tight financing. That gap between rising demand and limited new development is exactly the setup that drives occupancy and rate growth, and the SHOP conversion positions LTC to capture it. The first quarter validated the direction: Nareit FFO rose to $0.72 per share from $0.65 a year earlier, and core FFO beat expectations. The bull case is that the pivot converts a steady-but-capped landlord into a participant in a recovering, demographically favored property type.
Bear Case
The competitive and structural pressure on LTC comes from the operators who actually run its buildings, and the move into SHOP makes that exposure direct rather than buffered. As a triple-net landlord, LTC collected rent regardless of how its tenants performed; under the SHOP model it now absorbs the operating results, which means it competes in the same labor market and against the same operators as its larger healthcare-REIT peers. Welltower and Ventas have spent years and billions building seniors-housing operating platforms with scale in operator relationships, data, and capital. LTC is converting into that model later and smaller, and a sub-scale operator-facing platform faces higher per-unit costs and less negotiating leverage with the management companies that run the communities. The same recovery the bull is counting on, occupancy and rate growth, is being chased by far bigger competitors with deeper pockets.
The SHOP transition introduces volatility the triple-net model did not have. Seniors-housing operations carry direct labor exposure, and staffing costs in nursing and care roles have risen sharply and remain elevated. Under SHOP, wage inflation hits LTC's income directly, where before it was the tenant's problem. The 10-K already shows the transition is not frictionless: the company "wrote-off the related working capital note of" $1.0 million when converting communities into SHOP in the fourth quarter of 2025. As more of the portfolio shifts to operating exposure, the predictability that justified a REIT's premium dividend reliability erodes, and a soft quarter in occupancy or a spike in labor costs would flow straight to FFO.
The balance sheet and the capital math frame the risk. Net debt sits at about 5.5 times FFO, which is manageable but not conservative, and the company is funding a roughly $600 million SHOP acquisition program in 2026 while divesting skilled-nursing assets. The share count has grown about 5.6% a year, meaning LTC is issuing equity to fund the transition, and equity issuance at a sub-6% FFO yield to buy properties is accretive only if the SHOP economics deliver. If the seniors-housing recovery stalls or labor costs outrun rate growth, LTC will have traded the safety of fixed rent for the volatility of operations at exactly the wrong moment. The dividend has been held flat, not raised, which is the market's signal that the transition consumes the cash the growth is supposed to create.
Valuation
The right frame for LTC is funds from operations, not reported earnings, and on that basis the price is defensible. FFO of about $3.17 per share supports the relative-multiple and growth methods, which land near or above the current level, while the earnings-power methods that flag the stock as expensive are misapplied: they capitalize depreciation-suppressed accounting earnings rather than the cash a property portfolio actually throws off. The pattern across the methods is that the price is justified by the lenses that credit cash flow and growth, and looks expensive only under the lens that does not fit real estate. That is the signature of a REIT priced fairly on its own metrics.
The transition complicates the read, because the company is changing what it is. The triple-net portfolio is valued on rent coverage and cap rates, a stable income stream; the growing SHOP segment is valued on operating net operating income, which is higher-growth but more volatile. As SHOP heads toward roughly 40% of net operating income, the blended cash flow shifts from predictable rent toward operating results that rise and fall with occupancy and labor costs. The methods that reach the price are crediting the growth the SHOP pivot is meant to deliver. The decisive question is whether that operating income materializes as planned, because the price is paying for the transition to work, not for the old fixed-rent model.
Solvency for a REIT is read against FFO and the dividend, not corporate coverage ratios, and here it is adequate rather than fortress. Net debt is about 5.5 times FFO, the dividend has been paid for 25 straight years and is covered by core FFO and funds available for distribution, and 2026 guidance points to core FFO of $2.75 to $2.79 per share. The funding of the SHOP program relies on both asset sales and equity issuance, with the share count growing about 5.6% a year. The dividend yield near 5.9% is the floor under the stock, but the dividend has been held flat through the transition, which is the honest tell that the growth investment is currently absorbing the cash it is expected to generate.
Catalysts
The first-quarter 2026 report on May 7 showed the pivot accelerating with solid cash flow. Nareit funds from operations rose to $35.4 million, or $0.72 per diluted share, from $0.65 a year earlier, and core FFO of $0.69 beat the analyst estimate of $0.53, supporting the maintained $0.57 quarterly dividend. The strategic update was the centerpiece: roughly $570 million of recent seniors-housing acquisitions plus about $600 million of projected 2026 SHOP additions and around $265 million of skilled-nursing divestitures are expected to push SHOP to roughly 40% of annualized net operating income by year-end.
Management maintained full-year 2026 guidance, with core FFO per share of $2.75 to $2.79 and core funds available for distribution of $2.82 to $2.86, signaling confidence through the transition. The catalysts that matter are the pace and pricing of the SHOP acquisitions, since the program's accretion depends on buying at the right cap rates, and the occupancy and labor-cost trends inside the operating portfolio, which now flow directly to FFO. The dividend, held at $0.57 for now, is the metric income holders will watch for any sign the transition is straining coverage.
Peer Cohorts (Per Segment, With Filing Citations)
Real Estate Investments (reported)
- OHI (OMEGA HEALTHCARE INVESTORS, INC.)
- (no filing in the citation store)
- SBRA (SABRA HEALTH CARE REIT, INC.)
- (no filing in the citation store)
- NHI (National Health Investors, Inc.)
- (no filing in the citation store)
- GTY (GETTY REALTY CORP.)
- (no filing in the citation store)
SHOP (reported)
- WELL (WELLTOWER INC.)
- (no filing in the citation store)
- VTR (Ventas, Inc.)
- (no filing in the citation store)
- AHR (American Healthcare REIT, Inc.)
- (no filing in the citation store)
- DHC (DIVERSIFIED HEALTHCARE TRUST)
- (no filing in the citation store)
- SBRA (SABRA HEALTH CARE REIT, INC.)
- (no filing in the citation store)
- NHI (National Health Investors, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
LTC Q1 FY2026 results, May 2026 · LTC Q1 FY2026 guidance, May 2026