You Can't Control Dividend Cuts, but You Can Control What You Do About Them
If you are a dividend-focused investor, you will most likely experience a dividend cut at some point. Although a reduction in a dividend can hurt, rushing to make portfolio changes without understanding the reason for the cut could be a mistake. A quick look at the dividend reductions from Medical Properties Trust (NYSE: MPW) and (NASDAQ: EXC) helps to highlight why thinking through the logic of a cut can be helpful.
Medical Properties Trust is a real estate investment trust (REIT) that owns, as its name suggests, medical properties, particularly hospitals. That said, REITs are designed to pass income on to investors, so dividends are really important in this sector.
In the second quarter of 2023, Medical Properties paid a per-share dividend of $0.29. In the third quarter, the dividend announcement was for $0.15. That's a nearly 50% cut, which is a huge reduction.
Source Fool.com
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