With a 12% Dividend Yield, Is Medical Properties Trust Finally a Buy?
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- เผยแพร่เมื่อ 25 มิ.ย. 2024
- Medical Properties Trust (MPW) has received a lot of attention from investors due to its sky-high dividend yield. However, there’s a good reason it’s such a high-paying stock, and it’s important to fully understand what you’re getting into. In this video, two of our experts dive into the current state of the business and what investors need to know about it.
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Tell us you did zero research into a company without saying you did zero research.
One. They only cut the dividend one time.
Two. You’re basing whether or not it might need to cut the dividend again based on the yield, the FFO payout ratios like 60%.
Three. As Steward sells off parts of their business, those tenets will take over the lease even if they do get renegotiated they’re still gonna be paying the rent.
Four. MPW said in the last earnings call that all of this should be wrapped up by September.
This is an asset play, more than a dividend play, for the next 12-18 months, although the dividend is nice. They have assets on the books for 3-4 time the current stock price, and they have sold some properties above the value listed on the books, so there is no evidence that values are inflated. In fact, values look to be conservative. One the steward situation is resolved additional rents will start to flow back in and the dividend will be supported easily. In fact, I would expect in increases in 18 - 24 months, once new tenants stabilize. There is over two years to renegotiate the debt due in 2026, and they will either have 1) cash flow to support new debt, or 2) sold assets to pay off debt. Also, rate will probably drop back down by 2026. So, this stock has a lot of upside in next 6-12 month, but you may see it sooner if tenant bankruptcy is resolved quickly and favorably for MPW.
1 divided cut last year and even without Steward they still earned 30% more than necessary to cover dividend.
Properties sold this year for much higher than expected. Netting $1.6 Billion. Debt due has been paid in advance through 2025.
Steward (20% of MPW revenue missing for over a year) is getting the boot. All 30+ of their hospitals get auctioned this summer and all new tenants for MPW installed by September 30th. The auctions also result in MPW recovering +94% of what was previously written off.
So by Q4 the’ll not only have more cash in hand than ever before but also +25% more income than before and no debt to spend it on until 2026. By then interest rates will be cut and they might as well refinance those to hold instead of selling.
Finally, there are 225-ish million shares short right now on a stock that’s gone up 40% since January. Once those cover, the base share price value is in the $12-$15 range minimum. That’s a 100-150% share price appreciation on top of the reliable dividend. Hospitals aren’t going away any time soon.
I agree! They have been doing this for 20 years and the CEO is still young at 58. There is so many articles out slamming and rehashing bad news to drive down the stock price. It is all manipulation and negativity. I strongly believe they will recover and do the right things to have future growth. I'm holding for next 10 years and buying more every paycheck. Hospitals are essential and inflation with mismanagement is bad. I trust the management to do the right thing!
And of course hospitals aren't going anywhere. There's going to be a bigger demand for them with time, not less.
Some good information scattered throughout the video but not enough demonstrated knowledge to convince me to take your opinions seriously. The Steward bankruptcy is actually good for MPT, but you wouldn't know this if you didn't do the research to understand that.
You can spin the Stewart bankruptcy all you want. The reality is that MPT is going to have to sell about half of its assets to bring its debt under control, and the bankruptcy (while better than the alternatives) is still a net negative for MPT. There is no situation in real estate where a REIT's major tenant ends up going bankrupt and the REIT ends up better off than if the original leases were honored. If the company ends up raising its dividend within the next few years, I will gladly do a video saying I was wrong.
@@MattFrankelCFP Sorry, MPT is not going to have to sell “half its assets.” That’s a ridiculous assertion. MPT has made a profit for the last many quarters without rent money from Stewart. This is no different than a landlord pursuing the ejection of a deadbeat tenant. The ejection of that tenant is a good thing because there will be a paying tenant moving in. That is not a spin on the situation, that is basic landlord/tenant math.
@@Sanddollar1 Indeed...When I compare them to other REITs in the space like WELL, VTR, OHI DOC & SBRA, I can see that MPW is just having growing pains....As they sell off assets, they will get fit, lean and efficient...This will be one of the best turn-around/value plays in recent times...
@@MattFrankelCFP *The reality is you're a paid shill paid to come to TH-cam or where else and spread false and negative and uninformed information about MPW because that's what you're paid to do.*
Stewart already wasnt paying them, so that earnings doesn't include rent from stewart. So the bankruptcy could be a positive where the property quickly gets sold and they start collecting that rent again .
So you were wrong on every point you tried to make to date regarding MPW (along with motley fool). Just wondering if you changed your mind after all the huge news this week.
Respectfully disagree, and no I have not changed my mind. I'm not sure what the huge news is...the company is still going to have to sell off tons of assets to survive. But I hope they can execute and create value for you.
The only thing you proved is that MPW grew too fast because it used a lot of cheap debt to buy up $17 billion in assets...When I compare them to other REITs in the space like WELL, VTR, OHI DOC & SBRA, I can see that MPW is just having growing pains....As they sell off assets, they will get fit, lean and efficient this will be one of the best turn-around/value plays in recent times...
I'd argue that an urgent need to sell roughly half of your assets is more than "growing pains." I 100% think they'll survive -- it's just a question of what the fit, lean, and efficient version looks like when the dust settles. Not a fan of the other healthcare REITs right now either, with the possible exception of ARE (life science)
@@MattFrankelCFP So even though MPW has clearly bottomed, it's dividend is secure and you say it will survive, why not encourage investors to get in now and enjoy the 12% yield while they wait for the stock to triple, rising to it's current book value of $12 to $15 a share?
@@MattFrankelCFPI believe they sold for more than they paid for. Especially UT properties. Many assume they sell for a loss due to desperation. Not so
Meow this looks good on Reddit
Thanks, Matt and Tyler, for an excellent discussion on MPW, a REIT that I have chosen a long time ago to stay away from.
A long time ago you should have stayed away from it. Now it trades at 40% of book value. Valuation matters.
@@paulsondj--Management matters, too. No bueno.
@@davidwysocki1004 Everyone was singing the management's praises for the last twenty years until just the last couple of years. The problems they had with Steward are not their fault. Don't by the stock but at least be reasonable.