LTC Properties, Inc.

LTC Properties, Inc. (LTC), as stated on the company website, “is a self-administered real estate investment trust that invests primarily in the long-term care sector of the health care industry through the origination of first mortgage loans and acquisition of properties that are leased to numerous long-term care providers. LTC Properties operates in accordance with federal tax laws and regulation governing real estate investment trusts, which enables the Company's income to be distributed to its stockholders without federal tax liability to the Company.”

A map of the company's properties indicates a broad national exposure, as does a list of the communities where the properties are located. The top ten tenants (by annual rental revenues) are Extendicare Inc ($10,963,000), Brookdale Senior Living Inc ($10,734,000), Preferred Care Inc ($10,588,000), Senior Care Centers LLC ($6,748,000), Carespring Health Care ($5,431,000), Traditions Management ($5,243,000), Meridian Senior Properties ($4,742,000), Sunrise Senior Living Inc ($4,14,000), Skilled Healthcare Group ($4,501,000), and The Ensign Group ($1,596,000).

For the quarter ended September 30, 2012, LTC reported a 6.5% increase in Funds from Operations ("FFO") to $17.5 million from $16.4 million in the comparable 2011 period. FFO per diluted common share was $0.57 for the September 30, 2012 quarter, up 5.6% from $0.54 for the comparable 2011 period. Normalized FFO was $17.6 million in the third quarter of 2012 compared to $16.6 million in the third quarter of 2011. Normalized FFO per diluted common share was $0.57 for the third quarter of 2012 compared to $0.54 for the third quarter of 2011. The increase was due to higher revenues resulting from acquisitions partially offset by an increase in interest expense.

FFO for the nine months ended September 30, 2012 increased 22.4% to $52.2 million from $42.7 million in the comparable 2011 period. FFO per diluted common share for the nine months ended September 30, 2012 increased 15.8% to $1.69 from $1.46 in the comparable 2011 period. Normalized FFO increased 11.0%, which excludes a $0.3 million non-recurring bankruptcy settlement distribution from the Sunwest Management, Inc., to $52.2 million for the nine months ended September 30, 2012, from $47.1 million from the comparable 2011 period. Normalized FFO per diluted common share was $1.69 for the nine months ended September 30, 2012, up 5.6% from $1.60 for the comparable 2011 period. Normalized FFO for the nine months ended September 30, 2011 excluded a $3.6 million charge and $0.5 million accrued dividend related to the Company's redemption of all of its 8.0% Series F Cumulative Preferred Stock. The increase was due to higher revenues resulting from acquisitions partially offset by an increase in interest expense, acquisition costs and higher weighted average shares outstanding.

At September 30, 2012, assets totaled $709,833,000. Liabilities totaled $244,943,000. Total equity was $464,890,000. Minus preferred equity of $38,500,000, common shareholders’ equity was $426,390,000. With 30,498,000 common shares outstanding, the book value was $13.98 per share.  According to Morningstar, long-term debt as a percentage of capital was 27.4%.

LTC paid quarterly dividends through December, 2004.  From 1995 to 2004, the annual dividend rate ranged from a low of $.40 per share in 2002 to $1.56 per share in 1999. The company ended 2004 with an annual rate of $1.20 per share. In April, 2005, LTC began paying dividends monthly, beginning with $.11 per share, for an annual rate of $1.32 per share. The dividend was raised to $.12 per share in January, 2006, $.125 per share in January, 2007, to $.13 per share in January, 2008. The dividend was maintained, but not raised during the Great Recession. The dividend was raised to $.14 per share in November, 2010, and to $.145 per share in January, 2012. The company increased the monthly dividend again in August, 2012, to $.155 per share.  The current annual dividend rate is $1.86 per share.  At a December 26, 2012 closing price of $34.92, the yield is 5.3%.

I own shares of LTC in my retirement income account. I would consider buying more at $30.49 or lower, and I would consider selling some shares at $38.75 or higher. I believe LTC is worthy of consideration for inclusion in a dividend portfolio. Everyone’s situation is different. Do your own study and due diligence. This is not a recommendation to buy, but a suggestion for a stock to study.