With a 12% Dividend Yield, Is Medical Properties Trust Finally a Buy?

[@CP-qg4ks]

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.

[@DGmmnLm]

About the Steward tenets, they are selling the physician group separately from the hospitals, the physicians group is the “hot sell”, not the hospitals, and I believe the lease is with the hospitals. They have already closed down 1 hospital in Massachusetts, and the Judge has approved them to close 2 more by next month. The Judge also approved the sale of more hospitals moving forward. The Massachusetts AG has already informed MPT the lease is what is holding up any potential sales, and last I heard the Judge also approved the termination of the lease for any potential new tenets. I don’t think it is going to be new tenets in after a few months taking over that rent.

[@CP-qg4ks]

@@DGmmnLm The 2 closures are part of a rescue plan coming together between the bankrupt hospital operator and its many creditors and state regulators that should pave the way for the sale of six other Steward hospitals in Massachusetts to new owners. Carney and Nashoba were the only Steward hospitals in Massachusetts that did not receive qualified bids during the sale process. While the loss of Nashoba and Carney will further strain already busy hospitals in Eastern Massachusetts, the outcomes would be even more catastrophic if Steward were unable to sell its other facilities and had to close them. When the sale of the 6 hospitals is finalized those new tenants will pay the rent If the 2 hospitals in Massachusetts are so important to the city a deal should be done sooner or later. Even if MPW has to renegotiate the contract to make it happen a lower rate is better than nothing

[@Sanddollar1]

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.

[@MattFrankelCFP]

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.

[@Sanddollar1]

@@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.

[@paulbunyan9436]

@@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...

[@_Listen_to_Solar_Kama_Sutra]

@@MattFrankelCFP *The reality is you're a paid shill paid to come to KZbin or where else and spread false and negative and uninformed information about MPW because that's what you're paid to do.*

[@gravitationalvelocity1905]

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.

[@misternobody9801]

Can we get an update on this one. MPW just recovered 95% of steward rent going forward with these 4 new tenants and have debts paid (or covered) into 2026 without even calculating the 6 hospitals being re-opened in the near future. So even if this trades below book value of $10, the dividend would have to be increased significantly to meet the 90% payout REIT requirement. Not to mention 220 million trapped shorts that still need to cover which would drive the price up even higher.

[@claypool7897]

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 .

[@paulbunyan9436]

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...

[@MattFrankelCFP]

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)

[@paulbunyan9436]

@@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?

[@carlosnorris352]

@@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

[@texpadre5466]

Meow this looks good on Reddit

[@davidwysocki1004]

Thanks, Matt and Tyler, for an excellent discussion on MPW, a REIT that I have chosen a long time ago to stay away from.

[@paulsondj]

A long time ago you should have stayed away from it. Now it trades at 40% of book value. Valuation matters.

[@davidwysocki1004]

@@paulsondj--Management matters, too. No bueno.

[@Sanddollar1]

@@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.