As Expected, This Big-Time Dividend Hits the Chopping Block. Is It Time to Sell?
After months of speculation, Medical Properties Trust (NYSE: MPW) has slashed its dividend. The embattled healthcare real estate investment trust (REIT) is cutting its payout by nearly 50% to retain more cash to strengthen its balance sheet. The company also plans to sell additional assets to improve its financial situation.
These moves will enable the REIT to repay debt faster to strengthen its financial foundation, which has eroded due to higher interest rates and financial issues facing a couple of its top tenants. Here's a look at what the move means for investors.
Medical Properties Trust has reduced its quarterly dividend payment from $0.29 to $0.15 per share, a 48.3% reduction. The move will enable the healthcare REIT to retain additional cash to repay debt. It expects the reset payout level will initially be less than 60% of its projected adjusted funds from operations (FFO). That's down from a dividend payout ratio that would have been above 100% in the current quarter.
Source Fool.com
