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Recent Buy – LTC Properties (LTC)

LTC Properties LogoFinally I can post my first buy in August! I have been slacking lately on my buys but capital has been tight and used for other things. Can’t believe it has over a month since my last buy back at the end of June where I bought more shares of GIS. I am pleased to announce my August buy of LTC Properties Inc (LTC). This is a new position in my portfolio. I purchased 17 shares at a cost basis of $46.97. You can find more info on LTC below.

 

 

LTC Stats
Annual Dividend: $2.28
Yield: 4.78%
Years Paying/ Increasing: 5 years
Dividend increase from prior year: 5.3%
Payout Ratio: 73.3%
P/E Ratio: 21.1
EPS: $2.28

 

LTC is a healthcare REIT.  If you want to know more about them, you can see the full summary here at Google Finance. There are a few reasons why I like LTC.  First, the yield is over 4%, which seems pretty typical for REITs. It is not unlikely for REITs to have very high payout ratios. LTC actually has theirs fairly low which will help them maintain and increase their dividend. Lastly, they pay their dividends monthly! Monthly dividends will compound much faster than quarterly dividend earners. The only other monthly dividend payer I own is Reality Income (O). This purchase comes a few days prior to the ex-dividend date, so I will be able to collect the dividends immediately this month. Lucky for me, they pay on the last day of the month. I am looking forward to seeing this stock compound.

 

As shown above, LTC has a dividend yield of 4.78% or $2.28 annually. This will add another $38.76 to my yearly dividend income. Broken down monthly, it will add $3.23 per month. This new buy also finally puts my portfolio’s forward dividends over the $900 mark!

 

What do you think of this buy? Do you like LTC or do you currently own any? What other companies are on your watch list right now? Any REIT you would prefer over this? Comments welcome below.

 

26 Responses to “Recent Buy – LTC Properties (LTC)”

  • Monthly payments are nice. You usually have to turn to bond funds for that kind of regularity since so few stocks pay with that frequency.

    I assume the “payout ratio” you’re referring to is based on the so-called “funds from operations” (FFO) or maybe the “adjusted” version (AFFO)? Based on GAAP earnings or free cash flow it’s definitely not 73%.

    • Dividend Daze:

      Yeah it is really nice that a few stocks pay with that frequency. Only REITs I’m sure. They just have to space out their payments and make them smaller. Does probably make it harder on their accounting though that way. You are probably right about the payout ratio but I don’t know which way they base their accounting on. Took that number from Dividend.com so I don’t know where they got it from exactly. Either way, it should still be plenty to cover their dividend payments. As always, I appreciate your comment.

  • Nice purchase Dividend Daze. I actually was considering another health care REIT, namely OHI, but LTC looks like a good purchase too. Plus, since you already own Realty Income, you will benefit from two REITs that pay monthly dividends. Just awesome.
    Dividend Portfolio recently posted…How I Invested $15,000My Profile

    • Dividend Daze:

      I am loving the monthly dividends from O right now. More would never hurt. I was looking at OHI or adding more to my position with HCP actually. All solid choices. Looking forward to seeing what you pick if any.

  • REITs are required to pay out 90% of their income. Of course it doesn’t mean that they are unsafe investments. I also hold some HCP but hesitating to buy more asthan REITs usually don’t like increasing interest rates.
    The monthly payments are nice, especially if you reinvest. As catfishwizard said, I also only have monthly payments from a bond fund.
    Roadrunner recently posted…Our First Rental Property – SelectionMy Profile

    • “asthan” = as. I hate typing on my phone 🙂
      Roadrunner recently posted…Our First Rental Property – SelectionMy Profile

    • Dividend Daze:

      Yep, accounting is crazy and can be interpreted in different ways. I agree they have to pay majority of their revenue to shareholders which is why they are sought after from an investing standpoint and pay a higher yield. I am sure the rising rates will effect all REIT a bit, but that is short term. It should even out over time and I plan to hold for the long term. I appreciate your comments.

  • Nice buy DD! I have three healthcare REIT’s in the bag already (OHI, MPW, UHT). Over the past 2-3 years they have paid me well in dividends. Personally, I am avoiding purchasing any more REIT’s in general (unless a spectacular opportunity arises) as I am trying to diversity better outside REIT’s. I do keep O on my watch list, so we will see how it goes. Anyway, thanks for sharing! 🙂
    My Dividend Dynasty recently posted…One Month AnniversaryMy Profile

    • Dividend Daze:

      I agree with the allocation. I am getting heavy on REIT. But they pay so well, and I couldn’t pass up another opportunity for monthly dividend payments. This is probably the last one I will buy for a while as well. What sector are you looking to add to next? Or what stocks are on your watch list?

  • Like the LTC pick up. It’s a relatively new position for me in my IRA. I think it’s overlooked among our DGI peers as OHI seems to garner all the headlines. It appears to be one of the better monthly dividend payers out there. Thanks for sharing.
    DivHut recently posted…Recent Stock Purchase II August 2017My Profile

    • Dividend Daze:

      Yeah I was crunching the numbers between this and a few other quarterly payers. And for the same amount of capital, this kept inching out ahead as far as dividends go. Even without the monthly compounding. I like the pick up so far. Thanks for the recommendation DH!

  • Nice buy daze. I dont know much about the company itself but a healthcare reit seems pretty safe. People always need that and with the aging population more so. Congrats on hitting the 900 forward dividends!
    Passivecanadianincome recently posted…All I See Is Red.My Profile

    • Dividend Daze:

      You are correct with the aging population healthcare will only get bigger in the coming years. Might as well try to get in on it now. I am excited to finally hit the 900 mark, but I have a long way to go still to get to 1k. Thanks for your comment!

  • Nice buy, I’m curious to know why you deciced to go with LTC instead of MPW?
    Mr. Robot recently posted…July 2017 Dividend reportMy Profile

    • Dividend Daze:

      A few reasons. MPW’s yield is really high, like over 7%. Doesn’t seem sustainable long term. It is a relatively new company so it doesn’t have as much history to reflect upon. LTC has been increasing dividends for longer and a higher overall growth rate. MPW pays quarterly and LTC pays monthly so the compounding will be greater long term. Also in times of crisis (08-09), MPW cut their dividend. While LTC didn’t increase theirs at that time, they didn’t cut it either and continued to pay until they could increase it again. But that is just my thoughts anyway. Always nice to try to question and find the best options to put your money in. Thanks for stopping by and commenting!

  • Hi DD,

    Well, I got a few issues with LTC 🙂

    – too small of a market cap compared to their bigger competitors
    – No credit rating
    – Yield is below 5%
    – They are facing FFO pressure and downgrades as their sixth largest customer Anthem recently defaulted. I have seen similar story with HCP which btw was a blue chip REIT and a dividend champion. HCP cut its dividend and still hasn’t recovered from the stock price plunge.

    At the current dividend and valuation P/FFO 15.8, LTC is expensive and quite risky.

    VTR would have been a better buy in my opinion.

    Mr. ATM
    Mr.ATM recently posted…How To Know When To Sell A Stock?My Profile

    • Dividend Daze:

      I always appreciate your analysis. Very insightful indeed. My position is not that large so I don’t mind taking a little risk. I still own HCP even after the dividend cut. The price was close to a rebound but then dropped again. However, HCP did a spin-off of QCP. So it is understandable they had to cut their dividend. Lost a portion of their business so the dividend at the time wasn’t sustainable. That was the only time they could have cut it and taken the opportunity to re-position itself for long therm.

      • Yeah, I was stuck with QCP junk spin-off. I sold it right away along with HCP shares before the dividend cut. It was obvious dividend wasn’t sustainable.

        Anyhow, good luck with LTC, it’s a good company and has an excellent track record of paying and raising dividends. So hope it works out for you.

        Take care,
        Mr. ATM
        Mr.ATM recently posted…How To Know When To Sell A Stock?My Profile

  • Looks like a very good buy! I need some REIT’s my self 🙂
    RichestManInLondon (@RichestManInLDN) recently posted…Financial Goals On The Road To GloryMy Profile

  • Nice purchase, DD!
    I’m a fan of REITS too! I like that you mentioned the compounding benefits of the monthly payments. It sounds like a great add to your portfolio overall. It’s good diversification in that it’s a healthcare REIT, and it’s hard to argue with a 4% plus dividend payer. I’ve been buying Riocan (REI.UN) recently, which is a Canadian retail REIT. The fear of retail disappearing and rising interest rates have lowered the price and now I’m getting a 5% plus yield :). Thanks for sharing. I’m looking forward to your next report!

    • Dividend Daze:

      That is awesome. Can’t argue 5% as long as they are able to continue to increase and show growth. The fear of others is what gives added value to the market for investors like ourselves. Thanks for your comment!

  • SMM:

    This looks good and people will always need healthcare! I’ve had AGNC for a year or so and it’s done well. Do you buy REITs in a tax-advantage account?
    SMM recently posted…Simple Fund Comparison – SCHD VS VIGMy Profile

    • Dividend Daze:

      Never heard of AGNC till now but, wow look at that 10% yield. Hope they are able to sustain that. I should use my tax-advantage accounts for REIT’s but to be honest, I don’t. Those accounts are more used for mutual funds to just sit and grow. My taxable account is where I make all my individual buys like this. Just easier to keep track if it is all in one account I guess. And if/when I reach FIRE, I will need to use the income from the taxable account for my expenses until I am able to draw from the tax-advantage accounts. Don’t want to have to pay any fees for pulling anything out of those accounts early. So there is still a method and benefit to having them in a taxable account. Especially when they pay monthly.

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