If one of a company's core metrics for predicting its future returns worsened by around 0.1% from one quarter to the next, most of the time it wouldn't be worth following up on. Such an insignificant proportional change could easily be random noise rather than a concerning signal.

But for Medical Properties Trust (NYSE: MPW), that fraction of a percent is yet another piece of bad news. Here's why.

Real estate investment trusts (REITs) like Medical Properties Trust operate by borrowing tons of money and then using that money to buy real estate, which in this company's case means hospital and clinical properties. Then, over the following years, the properties yield rental income that's used to pay for the REIT's overhead costs, while it also pays down its debts and gives excess capital to shareholders via the dividend. Once the company is deleveraged enough to borrow more money at an attractive interest rate, it can make additional acquisitions and grow its top and bottom lines.

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Source Fool.com