Real estate investment trusts (REITs) tend to offer higher dividend yields. Medical Properties Trust (NYSE: MPW) is certainly no exception. The healthcare REIT currently has an eye-popping dividend yield of over 12%. That’s nearly 10 times higher than the S&P 500‘s dividend yield (around 1.3%).
Here’s a closer look at the healthcare REIT’s monster yield and whether investors can bank on that big-time payout.
Diagnosing Medical Properties Trust’s dividend
In late May, Medical Properties Trust declared its most recent quarterly dividend payment of $0.15 per share ($0.60 annually). With the REIT’s stock price recently below $5 per share, it had a dividend yield of more than 12%. That’s significantly above average, even for the higher-yielding REIT sector, where the average is over 4%.
The REIT’s low share price is a big factor behind its ultra-high yield. Its stock price has tumbled nearly 80% from its peak in early 2022.
Two factors have weighed on its share price: Higher interest rates and tenant issues. Its two largest tenants have struggled financially since the pandemic’s height, affecting their ability to pay rent. That issue and surging interest rates have hampered the REIT’s ability to refinance maturing debt. As a result, it has had to take several actions to shore up its balance sheet, including selling properties and cutting its dividend by nearly 50% last year.
These actions are starting to pay off. Medical Properties Trust was recently able to refinance some debt at a much more attractive rate. It’s working to take additional actions to improve its liquidity and portfolio, including selling or retenanting hospitals leased to its troubled tenants.
Is Medical Properties Trust a good REIT to buy for income?
Medical Properties Trust has improved its financial health significantly over the past year. However, it still has more work to do. Because of that, there’s an elevated risk that the REIT could cut its dividend again. Given that possibility, it’s not the best option for those seeking a bankable income stream right now.
Should you invest $1,000 in Medical Properties Trust right now?
Before you buy stock in Medical Properties Trust, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medical Properties Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $723,729!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of June 24, 2024
Matt DiLallo has positions in Medical Properties Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
What Is the Dividend Payout for Medical Properties Trust? was originally published by The Motley Fool
Signup bonus from
