As of June 21, 2025, LTC Properties Inc's estimated intrinsic value ranges from $22.04 to $84.35 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $36.35 | +3.9% |
| Discounted Cash Flow (5Y) | $39.01 | +11.5% |
| Dividend Discount Model (Multi-Stage) | $22.04 | -37.0% |
| Dividend Discount Model (Stable) | $84.35 | +141.2% |
| Earnings Power Value | $27.01 | -22.8% |
Is LTC Properties Inc (LTC) undervalued or overvalued?
With the current market price at $34.97, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate LTC Properties Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.48 | 0.57 |
| Cost of equity | 6.1% | 8.1% |
| Cost of debt | 4.7% | 6.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.42 | 0.42 |
| After-tax WACC | 5.3% | 7.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $39 | $2,450M | 86.8% |
| 10-Year Growth | $36 | $2,328M | 75.2% |
| 5-Year EBITDA | $21 | $1,605M | 79.8% |
| 10-Year EBITDA | $22 | $1,658M | 65.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $115M |
| Discount Rate (WACC) | 7.0% - 5.3% |
| Enterprise Value | $1,638M - $2,161M |
| Net Debt | $659M |
| Equity Value | $979M - $1,502M |
| Outstanding Shares | 46M |
| Fair Value | $21 - $33 |
| Selected Fair Value | $27.01 |
| Metric | Value |
|---|---|
| Market Capitalization | $1606M |
| Enterprise Value | $2265M |
| Trailing P/E | 14.38 |
| Forward P/E | 32.24 |
| Trailing EV/EBITDA | 14.80 |
| Current Dividend Yield | 639.97% |
| Dividend Growth Rate (5Y) | 2.72% |
| Debt-to-Equity Ratio | 0.42 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $10.91 |
| Discounted Cash Flow (5Y) | 25% | $9.75 |
| Dividend Discount Model (Multi-Stage) | 20% | $4.41 |
| Dividend Discount Model (Stable) | 15% | $12.65 |
| Earnings Power Value | 10% | $2.70 |
| Weighted Average | 100% | $40.42 |
Based on our comprehensive valuation analysis, LTC Properties Inc's weighted average intrinsic value is $40.42, which is approximately 15.6% above the current market price of $34.97.
Key investment considerations:
Given these factors, we believe LTC Properties Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.