600 Million Reasons This 7.7%-Yielding Dividend Should Keep Growing
Shares of Medical Properties Trust (NYSE: MPW) have been under a lot of pressure this year. The real estate investment trust's (REIT) stock has lost a third of its value due in part to rising interest rates. Those higher rates make it more expensive for the company to borrow money to fund real estate deals. Meanwhile, its falling stock price makes issuing new shares to finance growth less attractive. That slumping stock price has driven the REIT's dividend yield up to 7.7%.
While the market has concerns about the REIT's ability to continue growing its portfolio and dividend, it recently took a big step to address those worries. The REIT has announced a series of deals that will boost its liquidity by about $600 million. That will give it the funds to continue making accretive acquisitions, which should enable Medical Properties Trust to keep growing the dividend.
Medical Properties Trust has revealed a series of recent transactions to enhance its liquidity. The healthcare REIT announced that it successfully released the Watsonville Community Hospital in California to Pajaro Valley Health Care District Corporation, a recently created local not-for-profit organization. That group acquired the operations of the hospital after a short bankruptcy process. As part of the deal, the group repaid more than $30 million in financing Medical Properties Trust provided to allow the hospital to remain open. This deal showcases the value of its hospitals as essential infrastructure that appeals to many operators.
Source Fool.com
