Medical Properties Trust Could Be the Falling Knife You Don't Want to Catch
Medical Properties Trust (NYSE: MPW) pays an eye-popping 14% dividend yield right now. While it's certainly an attractive payout, it comes with significant risks. Shares have nosedived 62% over the past year as investors are concerned with the stock -- and rightfully so. Here's why you'll want to be extra cautious before deciding to invest in it.
If you're investing in a real estate investment trust (REIT), the one thing you don't want to see is the word "default," or even the mere suggestion that a major tenant isn't able to pay rent. A tenant falling behind on rent and unable to pay in full is a big risk that could undermine the REIT's ability to continue paying its current dividend.
What was concerning on the company's latest earnings call was news that one of its top tenants, Prospect Medical, did not pay its full rent. And what I found even more concerning was that the healthcare-focused REIT didn't want to disclose if Prospect had paid any at all.
Source Fool.com
