PEAK - 2 REITs That Provide High Dividends and Are Better Investments Than Medical Properties Trust
2023-07-25 09:45:00 ET
A big yield can be quite attractive and also a warning sign. Consider Medical Properties Trust (NYSE: MPW) , a real estate investment trust ( REIT ) that owns hospitals and medical office buildings. The stock currently sports a dividend yield of about 11.6%. However, that's because the share price has tumbled more than 35% over the past year as some of the company's tenants have had difficulty paying their leases.
On top of that, the dividend may be at risk because so much of the company's operating cash flow is going toward servicing its dividend, leaving little room left over for expansion or even normal capital expenditures. Medical Properties' payout ratio based on funds from operations (FFO) ballooned to 138% in the first quarter.
For income-seeking investors, two other REITs might be worth considering instead: Healthpeak Properties (NYSE: PEAK) and Innovative Industrial Properties (NYSE: IIPR) . Both also have high dividend yields but substantially less risk. Let's take a closer look.
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2 REITs That Provide High Dividends and Are Better Investments Than Medical Properties Trust