Shares of Medical Properties Trust (NYSE: MPW) were skyrocketing 25.1% this week as of the market close on Thursday, according to data provided by S&P Global Market Intelligence. The big jump was due to two positive announcements from the company last week.
On Friday, April 12, Medical Properties Trust reported the sale of its interests in five Utah hospitals to a joint venture (JV) with an investment fund for around $1.1 billion. Medical Properties Trust owns roughly 25% of the JV. The same day, the healthcare real estate investment trust (REIT) declared its quarterly dividend of $0.15 per share — unchanged from the previous quarter.
Why investors liked Medical Properties Trust’s news so much
Much of Medical Properties Trust’s value proposition to investors stems from its ultra-high-yield dividend. Some investors were likely worried that the REIT would cut its dividend payout for the second time in nine months. That didn’t happen, allowing shareholders to breathe a big sigh of relief.
Even better, the sale of the Utah hospitals further fortifies Medical Properties Trust’s balance sheet. This deal came on top of another sale announced on April 9 of five facilities in California and New Jersey to Prime Healthcare for a total of $350 million. These transactions improve the likelihood that Medical Properties Trust can continue to pay its dividend at current levels.
Is Medical Properties Trust stock a buy now?
Medical Properties Trust’s latest updates arguably give investors a reason to be cautiously optimistic about the company. The stock could continue to be highly volatile, though. Medical Properties Trust isn’t out of the woods just yet. Most investors will be better off avoiding the stock for now. However, the healthcare REIT’s dividend yield of nearly 12.2% combined with the potential for a sustained rebound could be tempting to aggressive investors.
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 $514,887!*
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 April 15, 2024
Keith Speights 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.
Why Ultra-High-Yield Dividend Stock Medical Properties Trust Is Skyrocketing This Week was originally published by The Motley Fool