STAG Industrial (NYSE:STAG) versus LTC Properties (NYSE:LTC) Financial Review

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

Risk and Volatility

LTC Properties has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, STAG Industrial has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Valuation & Earnings

This table compares LTC Properties and STAG Industrial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LTC Properties	$197.24 million	8.88	$89.74 million	$2.33	16.61
STAG Industrial	$707.84 million	9.61	$192.85 million	$0.99	37.73

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LTC Properties	48.77%	10.49%	5.44%
STAG Industrial	23.94%	5.27%	2.81%

Dividends

LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.9%. STAG Industrial pays an annual dividend of $1.48 per share and has a dividend yield of 4.0%. LTC Properties pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. STAG Industrial pays out 149.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LTC Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LTC Properties	0	2	1	0	2.33
STAG Industrial	0	5	3	0	2.38

LTC Properties currently has a consensus target price of $37.00, indicating a potential downside of 4.42%. STAG Industrial has a consensus target price of $41.13, indicating a potential upside of 10.11%. Given STAG Industrial’s stronger consensus rating and higher possible upside, analysts clearly believe STAG Industrial is more favorable than LTC Properties.

Institutional and Insider Ownership

69.3% of LTC Properties shares are owned by institutional investors. Comparatively, 88.7% of STAG Industrial shares are owned by institutional investors. 2.0% of LTC Properties shares are owned by company insiders. Comparatively, 1.1% of STAG Industrial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

STAG Industrial beats LTC Properties on 9 of the 16 factors compared between the two stocks.

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's investment portfolio includes 201 properties in 26 states with 29 operating partners. Based on its gross real estate investments, LTC's investment portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties.

About STAG Industrial

We are a REIT focused on the acquisition, ownership, and operation of industrial properties throughout the United States. Our platform is designed to (i) identify properties for acquisition that offer relative value across CBRE-EA Tier 1 industrial real estate markets, industries, and tenants through the principled application of our proprietary risk assessment model, (ii) provide growth through sophisticated industrial operation and an attractive opportunity set, and (iii) capitalize our business appropriately given the characteristics of our assets. We are organized and conduct our operations to maintain our qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income. As of December 31, 2023, we owned 569 buildings in 41 states with approximately 112.3 million rentable square feet, consisting of 493 warehouse/distribution buildings, 70 light manufacturing buildings, one flex/office building, and five Value Add Portfolio buildings. In addition, as of December 31, 2023, we had six development projects (which are not included in the building count noted above). While the majority of our portfolio consists of single-tenant properties, we also own a growing number of multi-tenant properties. As of December 31, 2023, our buildings were approximately 98.2% leased, with no single tenant accounting for more than approximately 2.9% of our total annualized base rental revenue and no single industry accounting for more than approximately 11.0% of our total annualized base rental revenue. We intend to maintain a diversified mix of tenants to limit our exposure to any single tenant or industry. As of December 31, 2023, our Operating Portfolio was approximately 98.4% leased. SL Rent Change on new and renewal leases together grew approximately 44.0% and 24.3% during the years ended December 31, 2023 and 2022, respectively, and our Cash Rent Change on new and renewal leases together grew approximately 31.0% and 14.3% during the years ended December 31, 2023 and 2022, respectively. We have fully integrated acquisition, leasing and operations platforms led by a senior management team with decades of industrial real estate experience. Our mission is to deliver attractive long-term stockholder returns in all market environments by growing cash flow through disciplined investment in high-quality real estate while maintaining a strong balance sheet.