Analyzing LTC Properties (NYSE:LTC) & Agree Realty (NYSE:ADC)

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LTC Properties (NYSE:LTC) and Agree Realty (NYSE:ADC) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Institutional and Insider Ownership

75.8% of LTC Properties shares are held by institutional investors. Comparatively, 95.5% of Agree Realty shares are held by institutional investors. 1.6% of LTC Properties shares are held by insiders. Comparatively, 3.1% of Agree Realty shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for LTC Properties and Agree Realty, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LTC Properties 3 0 0 0 1.00
Agree Realty 0 2 3 1 2.83

LTC Properties currently has a consensus price target of $33.00, indicating a potential downside of 32.20%. Agree Realty has a consensus price target of $68.20, indicating a potential downside of 4.89%. Given Agree Realty’s stronger consensus rating and higher possible upside, analysts plainly believe Agree Realty is more favorable than LTC Properties.

Earnings & Valuation

This table compares LTC Properties and Agree Realty’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LTC Properties $168.65 million 11.47 $154.98 million $3.06 15.91
Agree Realty $148.20 million 20.31 $58.17 million $2.85 25.16

LTC Properties has higher revenue and earnings than Agree Realty. LTC Properties is trading at a lower price-to-earnings ratio than Agree Realty, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

LTC Properties has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500.

Profitability

This table compares LTC Properties and Agree Realty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LTC Properties 63.58% 13.07% 7.03%
Agree Realty 39.76% 5.19% 3.19%

Dividends

LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 4.7%. Agree Realty pays an annual dividend of $2.28 per share and has a dividend yield of 3.2%. LTC Properties pays out 74.5% of its earnings in the form of a dividend. Agree Realty pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty has raised its dividend for 6 consecutive years. LTC Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

About LTC Properties

LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC holds more than 200 investments in 28 states with 30 operating partners. The portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties.

About Agree Realty

Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants. As of March 31, 2019, the Company owned and operated a portfolio of 694 properties, located in 46 states and containing approximately 11.9 million square feet of gross leasable space. The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC".

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