LTC Properties Hikes Dividend - Analyst Blog
January 06 2012 - 9:00AM
Zacks
LTC Properties
Inc. (LTC), a healthcare real estate investment trust
(REIT), has recently increased its monthly dividend for first
quarter 2012 by about 3.6% compared to the last dividend payout in
the previous months of the earlier quarter. The common stock
dividend of 14.5 cents per share per month is payable on the last
working day of each of the respective month in the quarter.
A steady dividend payout
facilitates the long-term strategy of LTC Properties to provide
attractive risk-adjusted returns to its stockholders. Investors
looking for high dividend yields are increasingly favoring REITs
like LTC Properties. Solid dividend payouts are arguably the
biggest enticement for REIT investors as the U.S. law requires
REITs to distribute 90% of their annual taxable income in the form
of dividends to shareholders.
LTC Properties primarily invests in
long-term care and other healthcare-related properties through
mortgage loans, property lease transactions, and other investments.
The company usually leases its healthcare facilities under "triple
net" leases, under which the tenant pays all taxes, insurance, and
maintenance for the properties, in addition to rent. This insulates
the company from short-term market swings that may adversely affect
the operations of a particular facility, and provides a relatively
steady source of income.
Healthcare is also relatively
immune to the economic problems faced by office, retail and
apartment companies. Consumers will continue to spend on healthcare
while cutting out discretionary purchases. The healthcare industry
is the single largest industry in the U.S. based on Gross Domestic
Product (GDP), and an aging Baby Boomer generation’s demand for
assisted and independent living facilities should increase in the
coming years.
Consequently, healthcare REITs like
LTC Properties are well poised to benefit from the long-term
positive dynamics of the industry. We presently have a ‘Neutral’
recommendation on LTC Properties, which currently has a Zacks #3
Rank that translates into a short-term ‘Hold’ rating. We also have
a ‘Neutral’ recommendation and a Zacks #3 Rank for Health
Care REIT Inc. (HCN), one of the competitors of LTC
Properties.
HEALTH CR REIT (HCN): Free Stock Analysis Report
LTC PROPERTIES (LTC): Free Stock Analysis Report
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