Is Medical Properties Trust's 12% Dividend Yield in Danger?
When a stock's dividend yield is 10% or more, it attracts attention. More often than not, it means something could be wrong with the underlying business -- or, at the very least, investors have significant concerns. Companies rarely raise their dividends high enough to produce that kind of yield based on the current stock price. An unusually high dividend yield suggests the share price has gone over a cliff.
That's what has happened with Medical Properties Trust (NYSE: MPW): The healthcare-focused real estate investment trust (REIT) is down 57% over the past 12 months, and is now trading at its lowest since 2009. With its dividend unchanged, the yield is now over 12%. Is it only a matter of time before there's a cut to the payout?
A good place for investors to start when evaluating a dividend is the earnings report. That can highlight how much money the company is making, whether it's generating enough in profit to sustain the payout, and if there are any alarm bells out there.
Source Fool.com
