MPW - Medical Properties Trust: Who Cares About The Dividend

2024-06-20 10:45:51 ET

Summary

• Medical Properties Trust has a high priority as a lender in the bankruptcy process and stands a good chance of recovering its investment.
• Impairments have affected the company's funds flow calculation, but there is still cash generated from operations.
• The company's management has a good track record with bankruptcies, but the current situation is a larger Steward bankruptcy.
• Company liquidity appears adequate to handle whatever happens.
• Market fears are overblown about what can happen during bankruptcy that is unpredictable.

Now is not the time for any investor to worry about whether or not the dividend is safe. Medical Properties Trust ( MPW ) is dealing with its largest tenant, having filed for voluntary bankruptcy. As I noted in the last article, the stock is likely going nowhere until things become clearer. Now it would appear that there is enough clarity to move this to a speculative buy. If the dividend gets maintained, then good. But if the company needs that money elsewhere, then by all means cancel the dividend until the re-tenanting process is over with....

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