Where Will Medical Properties Trust Be in 5 Years?
If the sky-high forward dividend yield of 8.6% is making you consider a purchase of Medical Properties Trust (NYSE: MPW) stock, you aren't alone. The future of this hospital real estate business seems quite certain; it'll keep doing what has worked in the past, namely buying and then renting out healthcare spaces. And because there's little chance that the underlying demand for hospital real estate is going to drop much, the risks of an investment appear to be limited given the amazing yield.
But Medical Properties Trust has a bit of an obstacle course to navigate within the next five years, and the investments it makes in that period could potentially sow the seeds of trouble farther down the line. Let's map out the obstacles and risks it'll face between now and 2028 to see if its passive income-making potential is as good as it looks at first glance.
At the start of 2028, Medical Properties will likely have a larger base of rental revenue than it does now; the only question is by how much. Wall Street analysts, on average, don't expect the company to generate much more in 2023 than the approximately $1.5 billion it's anticipated to bring in for 2022, and it's possible that the top line will actually shrink slightly this year. But at least six of its ongoing development projects will start to yield rent in the next few years, with two hospital projects in Spain slated to commence this year. So even if the company doesn't grow rapidly, we can reasonably expect a larger top line.
Source Fool.com
