Is Medical Properties Trust Stock a Buy?
With a gargantuan forward dividend yield that's currently around 11%, it's no wonder investors are pondering whether to buy shares of Medical Properties Trust, (NYSE: MPW), and stat. Locking in such a high yield for the long term could generate a ton of cash, assuming the company is able to keep up the payment.
And that's exactly what might be the issue with this stock: That dividend might not be there for shareholders in the future. So let's investigate this company a bit further to see if an investment is worth the risk of its passive income potential falling short.
The key to understanding MPT's worthiness as an investment is appreciating that it's a real estate investment trust (REIT) and what that means for its growth prospects. As a REIT, its primary means of generating revenue is from the rent it collects from tenants, which are typically hospital companies that need clinical space in one of its facilities. For 2022, its rents led to $934 million in funds from operations (FFO), a small decline from the $976 million it made in 2021.
Source Fool.com
