Contrasting Store Capital (NYSE:STOR) and LTC Properties (NYSE:LTC)

LTC Properties (NYSE:LTC) and Store Capital (NYSE:STOR) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

76.0% of LTC Properties shares are held by institutional investors. Comparatively, 90.3% of Store Capital shares are held by institutional investors. 1.8% of LTC Properties shares are held by company insiders. Comparatively, 0.8% of Store Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for LTC Properties and Store Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LTC Properties 2 1 1 0 1.75
Store Capital 0 2 7 0 2.78

LTC Properties currently has a consensus target price of $42.25, indicating a potential downside of 7.35%. Store Capital has a consensus target price of $33.57, indicating a potential upside of 0.18%. Given Store Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Store Capital is more favorable than LTC Properties.

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, Store Capital has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.

Valuation & Earnings

This table compares LTC Properties and Store Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LTC Properties $168.65 million 10.74 $154.98 million $3.06 14.90
Store Capital $540.76 million 14.07 $216.97 million $1.84 18.21

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

Profitability

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

Net Margins Return on Equity Return on Assets
LTC Properties 95.25% 19.07% 10.25%
Store Capital 37.19% 5.83% 3.14%

Dividends

LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.0%. Store Capital pays an annual dividend of $1.32 per share and has a dividend yield of 3.9%. LTC Properties pays out 74.5% of its earnings in the form of a dividend. Store Capital pays out 71.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Store Capital has increased its dividend for 3 consecutive years.

Summary

Store Capital beats LTC Properties on 10 of the 17 factors compared between the two stocks.

LTC Properties Company Profile

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.

Store Capital Company Profile

STORE Capital Corporation is an internally managed net-lease real estate investment trust, or REIT, that is the leader in the acquisition, investment and management of Single Tenant Operational Real Estate, which is its target market and the inspiration for its name. STORE Capital is one of the largest and fastest growing net-lease REITs and owns a large, well-diversified portfolio that consists of investments in 2,255 property locations, substantially all of which are profit centers, in 49 states.

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