Medical Properties Trust (NYSE: MPW) has faced significant challenges in recent years, including financial pressures from its top two tenants and rising interest rates, making borrowing more expensive.
These factors have led to a decline in its stock price, resulting in a high dividend yield of over 12%.
Despite these obstacles, the healthcare REIT’s outlook is improving. Medical Properties Trust has taken measures to enhance its liquidity, enabling MPW to declare its next dividend payment.
![MPW stock annual dividend yield. Source: Dividend.com](https://assets.finbold.com/uploads/2024/04/MPW-stock-annual-dividend-yield.png)
While Medical Properties Trust still has a journey ahead to regain stability, it is showing promising signs of progress in strengthening its financial position.
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Deal worth over $1 billion could bolster recovery
Medical Properties Trust has made significant moves to enhance its financial position recently. It agreed to sell a 75% stake in five Utah hospitals to a new joint venture with an investment fund for $886 million while retaining a 25% interest.
With additional financing secured by the joint venture, the total cash received amounted to nearly $1.1 billion. This influx of cash will be used to reduce the REIT’s outstanding debt, including paying off a $300 million Australian term loan and a portion of its revolving credit facility.
Additionally, the REIT closed the sale of five facilities in California and New Jersey to Prime Healthcare for $350 million, further boosting its liquidity. Overall, these transactions have provided the REIT with approximately $1.6 billion in additional liquidity this year, achieving 80% of its initial 2024 target of $2 billion.
MPW stock price chart
Medical Properties Trust is on track to surpass its liquidity target for the year, having already achieved 80% of it. With potential upside from tenants’ increased rental payments and potential sales of managed care businesses, the REIT’s stock price could see a significant recovery. This progress strengthens the foundation of its dividend and enhances shareholder value.
Looking at the YTD chart showcases a 6.32% decrease in MPW stock price, putting its valuation at $4.74, a long way off its all-time high of $24.15, achieved 4 years ago.
![MPW stock YTD price chart. Source: Google Finance](https://assets.finbold.com/uploads/2024/04/MPW-stock-YTD-price-chart.png)
However, if Medical Properties Trust manages to pull off its liquidity goal, bolstered by increasing rents from its tenants, then MPW shares might prove a great investment option in the long run.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.