2023-11-09 07:07:00 ET
Did you know that investing approximately $8,300 would be enough for a 12%-yielding dividend stock to generate $1,000 in annual income for your portfolio? Medical Properties Trust (NYSE: MPW) pays that high of a yield right now based on Tuesday's closing stock price, which is why it might be a tantalizing dividend stock to own. The good news is it's looking a lot safer than just a few months ago. Here's why investors can feel a bit more bullish on this beaten-down stock.
Earlier this year, Medical Properties Trust drastically reduced its dividend payments. At $0.15 per quarter, the new dividend is nearly half of the $0.29 that the real estate investment trust (REIT) was previously paying investors. That's a sizable reduction. But what's important is that it makes the dividend much more sustainable moving forward.
Last month the REIT reported its third-quarter earnings. For the period ending Sept. 30, Medical Properties' normalized funds from operations (NFFO) totaled $0.38 per share -- more than double the rate of its current dividend. And over the past three quarters, it has totaled $1.22, which averages out to an NFFO of $0.41 per quarter, which is even higher. That gives the business plenty of buffer to make dividend payments, and it even gives it room for its earnings to worsen and for the dividend to still be safe. Although this isn't a guarantee that things will stay this way, the REIT's dividend does appear to much more manageable moving forward.
For further details see:
3 Reasons for Investors to Feel More Comfortable With Medical Properties Trust's Insanely High 12% Yield