Financial Review: AGNC Investment (NASDAQ:AGNC) versus LTC Properties (NASDAQ:LTC)

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for AGNC Investment and LTC Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGNC Investment 0 2 4 0 2.67
LTC Properties 2 1 1 0 1.75

AGNC Investment presently has a consensus target price of $17.90, suggesting a potential upside of 6.74%. LTC Properties has a consensus target price of $42.25, suggesting a potential downside of 4.86%. Given AGNC Investment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AGNC Investment is more favorable than LTC Properties.

Dividends

AGNC Investment pays an annual dividend of $1.92 per share and has a dividend yield of 11.4%. LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.1%. AGNC Investment pays out 81.7% 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 pays out 74.5% of its earnings in the form of a dividend.

Risk & Volatility

AGNC Investment has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, LTC Properties has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Profitability

This table compares AGNC Investment and LTC Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGNC Investment -4.10% 11.71% 1.10%
LTC Properties 95.25% 19.07% 10.25%

Institutional & Insider Ownership

68.4% of AGNC Investment shares are owned by institutional investors. Comparatively, 76.0% of LTC Properties shares are owned by institutional investors. 0.3% of AGNC Investment shares are owned by insiders. Comparatively, 1.8% of LTC Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares AGNC Investment and LTC Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AGNC Investment $776.00 million 11.59 $129.00 million $2.35 7.14
LTC Properties $168.65 million 10.46 $154.98 million $3.06 14.51

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

Summary

LTC Properties beats AGNC Investment on 10 of the 16 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

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.

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