This Embattled Ultra-High-Yield Dividend Stock Continues to Push Back Against Its Critics
Medical Properties Trust (NYSE: MPW) stock has gotten hammered since reporting its second-quarter results in early August. The healthcare REIT's stock price has lost nearly a third of its value since that time. That has driven its dividend yield up over 15%.
The biggest weight is issues with the additional support it's providing two of its largest tenants (Steward Health Care and Prospect Medical Holdings), which are facing significant financial pressures following the pandemic. Their problems have impacted the REIT's financial profile, increasing the probability it will need to cut its big-time dividend. The REIT is facing criticism for how it's handling those issues, which it's quickly addressing.
In late May, Medical Properties unveiled comprehensive recapitalization transactions with Prospect Medical. Third-party lenders provided that company with $375 million in financing. Meanwhile, the REIT restructured its relationship, exchanging the value of hospitals in Connecticut and Pennsylvania and accrued rent and interest for an equity interest in Prospect's valuable managed care business.
Source Fool.com
