Medical Properties Trust (NYSE: MPW) recently made the difficult decision to slash its dividend by nearly 50%. That reduced its current yield from the mid-teens to around 9%. The massive payout cut is a huge blow to income-seeking investors because it will cut a chunk out of their passive income. 

However, while the dividend reduction is a tough pill to swallow, it's the necessary medicine for a company that needs to shore up its financial situation. Here's a look at why the healthcare REIT's dividend cut could benefit the company over the long run.

Medical Properties Trust has battled many headwinds over the past couple of years. Several of its tenants have experienced financial pressures following the pandemic, making it more difficult for them to pay rent. That has weighed on the REIT's cash flow, putting pressure on its balance sheet.

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Source Fool.com